Sultan Qaboos of Oman, the only Gulf leader to maintain good relations with Tehran, arrived in Iran Sunday for a visit focussed on economic and diplomatic issues, Iranian authorities said.
Iranian foreign ministry spokesman Abbas Araqchi said "the main focus of the negotiations is boosting energy and economic cooperation."
During the two-day visit, talks will also look into "regional and international topics, particularly Egypt and Syria," Araqchi said in comments reported by official news agency IRNA.
Iranian media quoting diplomatic sources said that Muscat hopes to bolster its position as a mediator between the West and Iran.
Oman has acted as an intermediary between western countries and Iran several times in recent years.
The Gulf state's mediation has helped to free several US nationals detained in Iran, since Washington and Tehran cut diplomatic ties in the 1980s.
Muscat has also represented Iran's interests in the UK since the closure of the Iranian embassy in the wake of an attack on Britain's mission in Tehran in November 2011.
Iran's new foreign minister, Mohammad Javad Zarif, said that he was unaware if Qaboos had a message from the US.
"We have not been informed if he is carrying a message (from Washington) but we are ready to talk about the subjects" that Sultan Qaboos wants to discuss, he said.
Qaboos is also due to meet supreme leader Ayatollah Ali Khamenei, Zarif, parliament speaker Ali Larijani and moderate ex-president Akbar Hashemi Rafsanjani.
The two countries are also due to restart talks on negotiations about Iranian oil and gas exports to Oman and developing joint offshore gas fields, according to media reports.
In 2009, the two countries signed an agreement for a joint 200-kilometre (124 miles) undersea gas pipeline between Iran and Oman.
Oman is a member of the Gulf Cooperation Council along with Saudi Arabia, Bahrain, Qatar, Kuwait and the United Arab Emirates.
The other oil- and gas-rich Sunni Muslim monarchies of the GCC have strained relations with Shiite Iran, which they accuse of trying to meddle in their internal affairs.
Relations between the GCC states and Tehran have deteriorated further because of Iran's support for Syrian President Bashar al-Assad in the country's bloody civil war.
Sultan Qaboos is the first guest of the new Iranian President Hassan Rowhani who was inaugurated on August 3. Shortly after his election, Rowhani said he hoped to improve relations with neighbouring countries, especially Gulf states.