By Claire Marshall BBC News correspondent in Mexico City

Ms Rice's visit came at a delicate time in bilateral relations

It comes after a slight chilling in the ties between the two neighbours.

A deal on a water dispute was announced, but there were no concrete developments declared in other areas, most notably on the immigration issue.

Some 10 million Mexicans live and work in the US. Last year, they sent nearly $17bn dollars back home.

There were high hopes when Mexican President Vicente Fox took office in 2000 that Mexico would at last reach a deal with the US to give these workers some form of legal status.

President Fox had a good relationship with US President George W Bush.

The American leader's first foreign visit as president was to Mr Fox's private ranch in Mexico.

However, the 11 September attacks in 2001 meant that the US focus immediately switched onto strengthening border security, rather than trying to reach a deal on immigration issues.

Four years on, and there is still no agreement.

'Success story'

On Thursday, Ms Rice was all smiles as she stood beside Mexico's Foreign Minister Luis Ernesto Dervez after they met for half-an-hour.

The majority of illegal workers in the US are Mexican

She described him as an old friend and called him by his first name.

The talks seem to be primarily a planning meeting for a Texas summit in March between the leaders of the US, Mexico and Canada.

Ms Rice's visit also comes after the US ambassador to Mexico criticised the Mexican government for its failure to tackle rising crime and corruption.

Mexican officials reacted with indignation calling his words interfering.