DAMASCUS, Dec 22: Turkey and Syria signed a free trade agreement on Wednesday and discussed how to keep Iraq united and stable despite the violence sweeping their neighbour.

Turkish Prime Minister Tayyip Erdogan flew to Damascus on a two-day visit aimed at cementing improved ties between the two countries, which nearly went to war in 1998 over Turkish charges that Syria was harbouring Kurdish guerillas.

Syrian President Bashar al Assad made a landmark visit to Turkey in January to bury the hatchet after years of tension over the rebels and disputes over land and water resources.

This visit comes days after the European Union's historic decision last week to start accession talks with Turkey. Syria is also seeking closer ties with the EU. "This visit shows how far our trade, economic and political ties have developed since President Assad's historic trip," Mr Erdogan told reporters.

Mr Erdogan signed a free trade zone agreement with Syrian Prime Minister Naji al Otari and discussed possible Turkish investment in Syria and joint agriculture projects.

"The economic and trade ties between our two countries would from now on be governed by the agreements that we have signed," Mr Erdogan said. He said the deal would allow investments by Turkish firms in Syria, currently at 150 million dollars, to increase rapidly.

Mr Otari said Syria was looking for capital to develop its mainly state-controlled economy. "Our goal at this stage is comprehensive development," he said. Syrian Information Minister Mahdi Dakhl said the agreement was expected to double the size of bilateral trade which currently stands at one billion dollars annually. He said better trade ties with Syria would open up the Arab market for Turkey. "Syria is Turkey's gate to the Arab world."

UNITY OF IRAQ: Mr Erdogan and Mr Otari said they also discussed Iraq. Mr Otari was quoted by the official Syrian news agency SANA as saying during the meeting that the occupation of Iraq had failed to bring peace and stability to the region and freedom and democracy to Iraqis. The Turkish prime minister also held talks with Mr Assad, which SANA said touched on Iraq. -Reuters