Prime Minister Atal Bihari Vajpayee on Saturday held substantive talks with Syrian President Bashar al Assad in the first summit-level contact between the two countries in 15 years.

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The discussions, focussed on developments in Iraq and the situation in the Middle East, also covered international and bilateral issues of mutual interest. The two countries are expected to sign agreements in areas as diverse as literature, biotechnology and economic ties, which are expected to lift the two-way trade turnover substantially from the current $130 million.

India offers a hand of friendship to Syria at a time when Damascus is facing isolation from the West. The US House of Representatives and Senate have passed the Syrian Accountability Act, paving the way for more sanctions against the country.

New Delhi may step in with technological aid in areas such as petroleum where American oil majors may have to pull out because of possible sanctions. Vajpayee, in a wide-ranging interview published by the English Daily Syrian Times, allayed Arab fears over India's military ties with Israel, saying they will not in any way dilute India's relations with the Arab countries.

Referring to the Kashmir issue, Vajpayee also clearly stated that dialogue with Pakistan cannot go hand in hand with terrorism. He said no meaningful talks with Islamabad were possible until it ended support to cross-border terrorism in Kashmir.

In the Organisation of Islamic Conference and the UN Security Council, Syria has shown considerable understanding of India's position on Kashmir as a bilateral issue to be solved on the basis of the Simla agreement.

Vajpayee earlier laid a wreath at the Monument of the Unknown Soldier in Damascus before beginning talks with Bashar at the presidential palace.

In the evening, he will attend an Iftar banquet hosted by the Syrian leader in his honour.

During his stay, he will also jointly open a Biotechnology Centre at the Damascus University for which India has provided technical support and Rs 10 million for equipment.