He is leading a high-level delegation that includes the ministers of the interior, finance, and economy, as well as the minister for refugees.
Karzai and Khatami are set to inaugurate the Doqarun-Herat road tomorrow.
The Iranian Embassy in Kabul said Karzai and Khatami would also open a newly completed power transmission line running from Torbat-e Jam in northeastern Iran to Herat, as well as eight border stations constructed by Iran in Afghanistan’s Herat, Nimruz, and Farah provinces.
Iran is working on several other reconstruction projects in Afghanistan. Media in December reported the opening of the first Iranian bank (Ariyan Bank) in Kabul.
Iran and Afghanistan are also cooperating in the fight against the trafficking of drugs from Afghanistan.
Colonel Christopher Langton, who heads the defense analysis department at the International Institute for Strategic Studies in London, said Iran is an important country in the future reconstruction and development of Afghanistan.
“They are being closely linked by efforts against the Taliban in the past, but also because of the influence that Iran can bring there with the Hazara population [who, like Iranians, are Shi'a Muslims]. And in the development sector, there are already projects which Iran is involved in -- for instance, the road from Bandar Abbas on the Persian Gulf up through Afghanistan to Central Asia is a very, very important project for the future of Afghanistan," Langton said. "There is a whole list of political, economic, and security issues which connect Afghanistan and Iran.”
Iran and Afghanistan are also connected historically and culturally. And Iran’s strained relations with the United States have not prevented Tehran from strengthening its economic and trade cooperation with Kabul since the U.S.-led fall of the Taliban in late 2001.
President Karzai’s trip to Iran comes amid growing speculation about a U.S. military strike on Iran. An article published recently in "The New Yorker" magazine said U.S. Special Forces have been penetrating eastern Iran from Afghanistan since last summer in order to identify sites for possible strikes.
In a recent interview with RFE/RL's Afghan Service, Afghan Defense Ministry spokesman General Mohammad Zaher Azimi denied the report.
“No forces have entered Iran from Afghanistan," Azimi said. "Afghanistan’s policy and strategy is to have good relations with its neighbors. We want to be sure about their non-interference, and they also should be sure about Afghanistan’s non-interference.”
A spokesman for Karzai, Rafiullah Mujaddedi, said he was unsure whether the Afghan and Iranian presidents would discuss reports that the U.S. military -- which has thousands of troops in Afghanistan -- had conducted spying missions inside Iran.
Langton said a U.S. military strike on Iran would have a deeply negative impact on ties between the two neighbors.
“The Iranian regime sees [Karzai] as somebody who was brought to power quite legitimately, but nevertheless on the back of very, very strong support from the U.S., which is still to a large extent maintaining its position inside Afghanistan," Langton said. "So any American military action against Iran -- however likely or unlikely -- is going to affect the way Iran and Afghanistan develop their relationship in the immediate and near future."
Lieutenant General Eric Olson, the operational commander of U.S. forces pursuing Taliban and Al-Qaeda remnants in Afghanistan, told AP on 24 January that he knew of no U.S. spying missions in Iran.
He also cautioned that any instability in the Islamic Republic could have an adverse effect on U.S. operations in Afghanistan.
Karzai and Khatami are also expected to discuss security issues and the repatriation of Afghan refugees living in Iran.
There have been reports in recent weeks of round-ups of illegal Afghan immigrants in Iran. The United Nations High Commissioner for Refugees (UNHCR) has expressed concern over the wave of arrests and said that there are indications that some registered refugees are being forcibly returned as well.
Iran has been host to more than 2 million Afghan refugees during the last two decades. But since the fall of the Taliban, Iranian officials have called on the refugees to return home.
The UNHCR estimates there are still 950,000 Afghan refugees in Iran.