Tasnim � Iran and Iraq have reached an initial deal to build a long highway that would ease traffic across the border and help boost trade between the two neighboring countries, an official said.

Iran�s Minister of Roads and Urban Development Mohammad Eslami said on Wednesday that the 354-kilometer highway would connect the city of Mehran on the western Iranian border to the holy city of Najaf in central Iraq.

�The Mehran-Najaf Highway could be a high-potential road for transit and trade exchanges between the two countries in addition to the function it would have for transporting the pilgrims,� Eslami said.

The minister added that Iranian and Iraqi officials had concluded �initial talks� for building the key road, Press TV reported.

A study by the Iranian parliament shows that nearly two million Iraqis visit Iran each year for pilgrimage purposes. The number of Iranians visiting Iraq for a similar reason is around 700,000 although over two million Iranians arrive in Iraq during the Arba'een period, a special religious occasion which takes place in the second month of the Islamic calendar.

Iran and Iraq have massively expanded their trade relations over the past years mainly as a result of deepening political ties between the two neighbors.

Iraq is only second to China in Iran�s list of top export destinations with more than $12 billion worth of goods and services purchased from Iran each year.

Iran has embarked on a series of major transportation projects to facilitate trade with Iraq, including a railway that would connect cities on the southwestern border to the Iraqi port city of Basra.