President Musharraf was talking to the First Vice President of Iran Parviz Davoudi, currently visiting Pakistan in connection with the 16th session of the Pak-Iranian Joint Economic Commission, a foreign ministry statement said.

"Pakistan wanted a peaceful settlement of this issue. It was important that confrontation should be avoided and flexibility should be shown by all sides. Pakistan would support efforts to reach an amicable settlement," Musharraf told the Iranian first vice-president.

He underlined Pakistan's opposition to proliferation of nuclear weapons, the statement said.

Davoudi appreciated Pakistan's principled stand and explained that nuclear weapons had no place in Iran's defense strategy, the statement said.

"Iran was prepared to give necessary assurances to that effect," it said.

The two sides also discussed bilateral relations and developments on regional as well as global issues of current interest.

Musharraf expressed satisfaction at the successful conclusion of the 16th session of Pak-Iranian Joint Economic Commission (JEC), which ended in Islamabad Thursday.

He noted that the JEC decisions together with the two new protocols signed would further increase trade and economic cooperation between the two countries.

The president reiterated Pakistan's keen interest in the Iran-Pakistan-India gas pipeline project. Progress had been made at various meetings of the Joint Working Groups. However, efforts should be accelerated to settle the remaining issues relating, mainly, to pricing.

Musharraf thanked the people and the government of Iran for their generous support to the earthquake victims in Pakistan.

It was reflective of the bonds of sincere friendship that characterized relations between the two countries, he said.