In a show of confidence after the worst riots in his country in a decade, Ahmadinejad made no mention of the violence or his hotly disputed re-election victory in his address to the Shanghai Cooperation Organisation (SCO) meeting.

"The international capitalist order is retreating," the hardline president told the leaders, including Russian President Dmitry Medvedev and China's Hu Jintao, gathered in the Russian city of Yekaterinburg.

"It is absolutely obvious that the age of empires has ended and its revival will not take place."

A broadly-smiling Ahmadinejad, wearing a dark suit and as usual no tie, earlier shook hands with a beaming Medvedev before the leaders went into the second day of the summit.

Whether Ahmadinejad -- who has a habit of stealing the limelight at such events -- would turn up had become a source of intrigue after he postponed his planned arrival on Monday following unrest over his disputed win in Friday's presidential election.

Ahmadinejad later held a bilateral meeting with Medvedev and the two sides agreed to continue contacts and develop economic cooperation, a brief Kremlin statement said.

Later Tuesday, US President Barack Obama raised "deep concerns" over the disputed Iranian election, but vowed not to meddle in internal Iranian politics.

His spokesman also said Obama wants direct diplomacy with Iran despite the violent protests there.

Obama has made unprecedented overtures to the Iranian leadership in a bid to end a standoff over Iran's nuclear programme. But Ahmadinejad expressed doubt about Washington's ability to solve global problems.

"Iraq is still occupied. There is no order in Afghanistan. The Palestinian problem is unsolved," he said.

"America is overwhelmed by economic and political crises and there is no hope in their decisions.

"The allies of the United States are also not in a position to wrestle with these problems."

Pointing to the economic crisis, Ahmadinejad said that "drastic changes are an unavoidable necessity" and attacked the "damage caused by international capitalism."

Russian deputy foreign minister Sergei Ryabkov earlier described the elections as an "internal affair of the Iranian people," in Moscow's first official reaction to the controversy.

The Iranian president was attending the summit in Iran's capacity as an observer to the organisation and Tehran has in the past expressed interest in becoming a fully-fledged SCO member.

The visit to Russia was Ahmadinejad's first foreign trip since his landslide re-election victory over his moderate rival Mir Hossein Mousavi sparked two days of street protests and at least seven people were reported killed.

In the latest sign of Beijing seeking to promote its influence in Central Asia, Hu announced that China would extend a 10 billion dollar (7.2 billion euro) credit to member states to help them overcome the financial crisis.

"China has taken a decision to extend to the organisation a credit worth 10 billion dollars to help maintain financial stability," Hu said.

"The global financial crisis continues to deepen, its influence on the global economy is becoming increasingly distinct," he added.

Russia hopes to use the SCO summit and the first summit of Brazil, Russia, India and China being held later on Tuesday in Yekaterinburg to boost its stature as an influential powerbroker.

The SCO was set up in 1996 as an alternative to NATO that would allow Russia and China to counter US influence in Asia.

Along with the two giants, the group also includes Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

On the sidelines of the meeting, Indian Prime Minister Manmohan Singh on Tuesday met Pakistan President Asif Ali Zardari for the first time since the Mumbai attacks. Their countries have observer status at the SCO.

Singh, whose country blamed the attacks on Pakistan-based militants linked to that country's powerful spy service warned Zardari that Pakistani territory should not be used for terrorism against India.

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