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President Bashar al-Assad and his Iranian counterpart Mahmoud Ahmadinejad signed a bilateral deal to remove travel visas and attended a Muslim ceremony in the Syrian capital.

Ahmadinejad's visit came a day after Clinton said the United States was asking Syria "to begin to move away from the relationship with Iran," and to stop supporting the Lebanese Shi'ite movement Hezbollah, which is also backed by Iran.

"We must have understood Clinton wrong because of bad translation or our limited understanding, so we signed the agreement to cancel the visas," Assad said.

"I find it strange that they (Americans) talk about Middle East stability and peace and the other beautiful principles and call for two countries to move away from each other," he added.

Ahmadinejad told a joint news conference: "Clinton said we should maintain a distance. I say there is no distance between Iran and Syria."

He added: "We have the same goals, same interests and same enemies. Our circle of cooperation is expanding day after day."

Support for Hezbollah forms the linchpin of the Syrian-Iranian alliance, formed 30 years ago despite ideological differences between the ruling hierarchy in the two countries.

Diplomats in Damascus said Syrian support for the group has been a main sticking point in the rapprochement between Syria and the United States, which started shortly after President Barack Obama took office in January 2009.

NUCLEAR DISPUTE