Iranian President Mohammad Khatami proposed the formation of an "Islamic union" as a force in world affairs during talks with Prime Minister Dr Mahathir Mohamad late yesterday, an official spokesman said.

The union would bring economically strong countries together with those with human resources in a bid to benefit all Islamic countries, Foreign Minister Syed Hamid Albar told reporters after the meeting.

"President Khatami brought the idea of a possibility of looking at an Islamic union where strong countries with economic resources and countries with human resources capabilities can combine together in order to take part and to be mainstream in global affairs," he said.

"At present we have the Organisation of the Islamic Conference (OIC), but there is no association as such.

"He just threw in the idea that we need to discuss further, look into it, because the most important thing is not the discussion forum, which we have plenty of, but what we want is something we can develop that will bring benefits to all Islamic countries."

Syed Hamid said the proposed union - which was "still at a very, very early stage" - could be launched by a small number of countries and joined by others later.

He gave no further details of what form the union would take, politically or economically.

Khatami met Mahathir on the first full day of a three-day visit to Malaysia during which the two Islamic countries are expected to focus on the situation in the Middle East and terrorism along with economic cooperation. — AFP