India and Iran held high level talks on Friday during which Prime Minister Manmohan Singh said bilateral cooperation between the two countries would continue despite problems in making payments for imported oil.

Dr. Singh told International Affairs Advisor to Iranian President Mahmoud Ahmedinejad and long-time former Foreign Minister Akbar Ali Velayati, that efforts would be made to find a permanent solution in making monthly payments of about $1billion for oil imported from Iran, which the Prime Minister said was India's second major source of crude.

Pressure, direct and indirect, by the U.S. and its western allies has closed one avenue after another of paying for Iranian crude. “The Prime Minister said some technical difficulties are there and we want to resolve this problem with understanding from both sides,” Mr. Velayati told journalists.

The former Foreign Minister with long-standing contacts with the top Indian leadership said there was no problem between the two countries over the Iran-Pakistan-India pipeline.

“The question is the problem of transit between India and Pakistan. There is no problem between India and Iran on this. Both countries want such a link up which is important to both sides. It is the nearest gas reserve for India and Iran cannot get a better customer like India,” he observed.

The Iranian President's Advisor was inclined in favor of greater involvement of the Shanghai Cooperation Organization (SCO) in resolving the Afghan problem. India has, at times, expressed faith in this organization which comprises of all the neighbours of Afghanistan, in bringing about durable peace to the country.

India's attitude ‘positive'

Mr. Velayati termed India's stand on Iran, expressed recently at the United Nations, as “positive” and “friendly.” India had spoken out against sanctions, favoured a diplomatic solution and urged Iran to answer clarifications sought by the International Atomic Energy Agency (IAEA).