The relationship between the two countries has evolved "to become a constructive one that is moving gradually forward one step at a time," Ali Larijani told reporters after talks with Egyptian Foreign Minister Ahmed Abul Gheit.

"Talks have focused on joint interests for both countries, and there is improvement on that front," he said.

The former nuclear negotiatior has been on a private visit to Egypt with his family since last week, but has also met senior officials including intelligence chief Omar Suleiman.

On Wednesday, after talks with Arab League chief Amr Mussa, Larijani urged Egypt not to rush renewing relations with Iran.

Diplomatic ties between the two countries were broken a year after the 1979 Islamic revolution in protest at Cairo's recognition of Israel and its hosting of the deposed shah.

Iranian President Mahmoud Ahmadinejad has said he favours resuming ties which would be "in the interest of the two peoples."

Egyptian foreign ministry spokesman Hossam Zaki told AFP that differences between the two governments centred on security and regional issues.

"Progress must be made on this before a resumption of relations," he said, adding that "talks are continuing between the two countries to resolve questions preventing a resumption of full diplomatic relations."