By Jim Muir BBC correspondent in Tehran

It is the first such visit to Pakistan by any head of state since the civilian government was formed there in November.

...The Iranians are eager to stabilise their relationships along their eastern front

The main items on the agenda are expected to include the situation in their mutual neighbour Afghanistan, tensions between India and Pakistan, the possible war in Iraq, and a major pipeline project.

This is a visit that simply could not have taken place until quite recently. Media in both countries have hailed it as a landmark event in their mutual relations.

New era

During the years of strife in Afghanistan, Iran and Pakistan were effectively waging a proxy war, with Islamabad supporting the Taleban and Tehran backing the Northern Alliance.

But all that changed after 11 September 2001 and the subsequent downfall of the Taleban.

A $3.5bn pipeline through Pakistan will be discussed

Now, both countries back the new government in Kabul, and their mutual relations have eased considerably.

In fact, on the eve of Mr Khatami's visit and the first anniversary of the Kabul government, Iran and Pakistan joined Afghanistan's other four neighbours in signing a solemn pledge never again to interfere in Afghan affairs.

With the focus now shifting west, to the potential conflict in another of Iran's neighbours, Iraq, the Iranians are eager to stabilise relationships along their eastern front.

"In this sensitive situation, we should try to expand relations, including in the political, economic and security fields," President Khatami said shortly before setting off on his trip.

Mediation

One major project that could help achieve that, and generate much regional prosperity, is the scheme to export some of Iran's vast natural gas reserves to India, via a new, $3.5 bn pipeline that would run through Pakistan.

On bilateral matters, the Pakistanis have made it clear that they would like to improve their trade imbalance with Iran

Iran has the world's second-biggest gas reserves after Russia, and is keen to reach the Indian market as soon as possible.

Many possible routes have been studied, including an under-sea pipeline, but the most economical option would be the overland pipe across Pakistan.

The problem, of course, is the acute tension between India and Pakistan, focused on disputed Kashmir.

The Pakistani leader, General Musharraf, has said Islamabad favours the pipeline project and would guarantee its security, but only Iran could persuade India to let it run through Pakistan.

"We expect that Iran will convince India to accept the security guarantees furnished by Pakistan, because we cannot convince Delhi ourselves," General Musharraf told the Iranian state news agency IRNA.

President Khatami is to visit India in a month's time, a trip that is bound to fuel speculation about Iranian mediation between the sub-continental rivals.

Trade

As Iran enjoys improving relations with both parties, General Musharraf said the Iranians might be in a position to promote talks between India and Pakistan over the Kashmir dispute.

On bilateral matters, the Pakistanis have made it clear that they would like to improve their trade imbalance with Iran.

General Musharraf said Pakistan was importing much larger quantities of Iranian oil than before - worth between $100m and $500m - and wanted to offset this by selling more rice and wheat to Iran.