TEHRAN: Iran's President Hassan Rouhani said that world powers will eventually look back at last month's nuclear deal as a wise precursor to better relations with the Islamic republic.

While, Foreign Secretary Philip Hammond said Iran is a major regional player that can be an ally in fighting terrorism — but that London must “tread carefully” in its relationship with Tehran.

These remarks came in a meeting between Rouhani and Philip Hammond, who is on the second and final day of a trip to Tehran.

British and Iranian embassies reopened in Tehran and London on Sunday, the latest step in ending a diplomatic chill stemming from the nuclear crisis and Western-led sanctions against Iran.

The nuclear deal — which will see those sanctions lifted in exchange a new inspections regime and curbs on Iran's atomic programme — is due to be implemented in the next few months.

“The negotiating parties will realise in the future that interaction rather than confrontation with Iran was the right approach,” the official IRNA news agency quoted Rouhani as saying.

“We consider this agreement as the start of a move toward creating a better situation in international and regional relations."

Hammond said Sunday that recent strife between Britain and Iran — a hardline mob trashed his country's Tehran embassy in 2011 after banking sanctions were announced, forcing its closure — were being repaired but it was an evolving process.

“We have come a long way but let's walk first and try to run later, “Hammond told reporters at Iran's foreign ministry.

Rouhani echoed that sentiment, alluding Monday to Britain's historical role in Iran — along with the United States it led a coup that toppled Prime Minister Mohammad Mossadegh in 1953.

“Although a nation's historical judgements cannot be changed quickly in a short period of time, we believe that one should not remain in the past. We should look to the future,” Rouhani said.

“By moving forward on different political, economic and regional issues we can guarantee long-term trust."

Hammond, who is accompanied by a small trade delegation, is the first British foreign secretary to visit Iran since Jack Straw in 2003.

He said they agreed on the need to defeat the Islamic State group, and to stop opium from Afghanistan reaching Europe.

Hammond told the BBC that “Iran is too large a player, too important a player in this region, to simply leave in isolation.”

“These ridiculous expressions, slogans and irrelevant jokes damage the process of trust-building” between Iran and world powers, Rouhani said during his meeting with Hammond, according to the president's official website.

European officials have been swift in heading to Iran since July 14, when the nuclear accord with Britain, China, France, Germany, Russia and the United States was announced in Vienna.

Iran's leaders have always denied international allegations that they sought to develop a nuclear weapon, insisting their activities are for peaceful energy and medical purposes.