Iran's outgoing President Mahmoud Ahmadinejad landed in Iraq on Thursday in his second official visit to the country, highlighting the growing ties between the two Shia-led neighbors.

The Iranian leader is expected to meet with top Iraqi officials and visit Shia holy sites during his two-day visit to Iraq, which is grappling with its worst outbreak of violence in half a decade.

Ahmadinejad previously flew to Iraq in 2008, the first ever trip by an Iranian president since Iran's 1979 Islamic Revolution and the two countries' bloody war in the 1980s. He used that earlier visit to emphasize a new chapter in "brotherly" relations between the one-time foes and take swipes at the United States over the legacy of its 2003 military invasion.

Iran's president-elect, Hasan Rouhani, is expected to be sworn in and take over from Ahmadinejad in early August.

Iranian state television reported that Ahmadinejad hopes the visit will boost economic cooperation between the two neighbours, which it says now amounts to $13 billion in annual trade.

Among topics on the agenda is the finalization of a gas import deal to ship 25 million cubic meters of Iranian gas daily to fuel Iraqi power plants, which are still incapable of provide a steady supply of electricity, according to Iranian state TV. A new gas pipeline from Iran is expected to open later this summer.

The U.S.-led invasion ten years ago that toppled Saddam Hussein's Sunni-heavy regime set in motion a rapid turnaround in relations between Iran and Iraq, which fought a ruinous eight-year war that claimed hundreds of thousands of lives.

Saddam's ouster put Iraq's majority Shia in control, and many Shias who had fled persecution by Saddam and took refuge in Iran returned home. Millions of Iranians now visit Shia holy sites in Iraq annually, and top Iraqi leaders including al-Maliki have paid visits to Iran.

Still, many Iraqis remain suspicious of Iranian influence in their country. Sunni Arabs in particular resent the government's warm ties with Tehran and some criticize al-Maliki of being too close to the Islamic Republic.

Washington wants Baghdad to do more to stop what it suspects are Iranian arms shipments being flown through Iraqi airspace to Syria's Iranian-backed regime. Shia militant groups inside Iraq, some of which have been sending militants to fight alongside Syrian regime troops, are believed to receive backing and training from Tehran.