MANAGUA : Iranian President Mahmoud Ahmadinejad, on a Latin American tour to round up anti-US allies, promised closer ties to Nicaragua, led by a one-time anti-US foe, President Daniel Ortega.

"Rest assured that we will improve our relations to the point of fulfilling every wish and thing that we desire. It is our will to walk hand in hand," Ahmadinejad said through a translator after meeting Ortega.

Ortega said Ahmadinejad's visit was "not merely a matter of protocol."

The Iranian president came from Venezuela, where he signed business agreements with President Hugo Chavez, an outspoken critic of US President George W. Bush. Each proclaimed the other an ideological "brother."

Ahmadinejad plans to burnish relations with other leftist Latin American critics of the Bush administration when he attends the inauguration of Ecuador's new president Rafael Correa, who has pledged to forge stronger ties with Venezuela and allow a lease for a US military airbase on the country's Pacific Coast to lapse.

The Iranian president will also meet other South American presidents including Bolivia's Evo Morales on the sidelines of the ceremony in Ecuador, before finishing his tour on Tuesday.

Nicaragua and Iran announced Sunday restoration of full diplomatic relations and re-opening embassies each other's capitals.

Ahmadinejad, who arrived on Saturday, was also to attend prayer services at the Islamic Centre of Managua.

Ortega, who was the Marxist leader of the leftist Sandinista National Liberation Front that ousted US-backed dictator Anastasio Somoza in 1979, was sworn in as president last week, promising generous anti-poverty programmes.

Analysts said that Iran, flush with oil money, is in a position to help Ortega with his ambitious plans.

"There is much more to be discussed in political-cultural cooperation and specifically in the field of the economy, investments and construction," the Iranian leader told reporters.

Ortega told reporters that Iran is willing to join Nicaraguans in a "battle to eliminate poverty among our people." The Central American country is one of the poorest in the Americas.

During his Venezuela stop, Ahmadinejad said the two countries had the task of "promoting revolutionary thought in the world."

"The reason for all the current problems is the erroneous direction of the powerful countries, where there is poverty, hatred, enmity and war," he said Saturday.

Western powers are determined to end Iran's enrichment of uranium. Iran says the nuclear fuel is for peaceful uses, while the West fears it could be used to build bombs.

Chavez, who has been a vocal advocate of Tehran's nuclear programme, said Venezuela and Iran would speak with "one voice."

Following their talks, the two presidents of oil-rich countries announced a joint effort to obtain new OPEC oil production cuts that would support slumping world oil prices, which have fallen 14 percent since January 1.

The announcement eclipsed the signing of 11 bilateral agreements, including a deal to create an international oil company. - AFP/de