Ahmadinejad went straight from Baghdad's airport to a meeting with Iraqi President Jalal Talabani, who gave him a red-carpet welcome.
Following talks between the two presidents, Ahmadinejad said his visit aimed to "strengthen" relations with Baghdad, which he called already "excellent."
"This visit will open a new chapter in the two countries' bilateral relations," he said, "and it will help the atmosphere of cooperation in the region."
Ahmadinejad said both sides plan to improve relations "as much as possible," and that Iran wants a united, sovereign, and advanced Iraq that would benefit the region.
Talabani called the visit "historic" and said the two discussed many issues.
"We have dealt with economy, politics, oil, security, and all other issues," he said. "God willing, as brother doctor Mahmud Ahmadinejad said before, the results [of the talks] are good and our views are close to each other. God willing, we will announce what we have agreed on after the talks are over."
Speaking later in the day following his own talks with Ahmadinejad, Iraqi Prime Minister Nuri al-Maliki said the Iranian president's visit was "an expression of the strong desire to enhance the relations and develop mutual interests after the past tensions during the dictatorship era."
Anti-Iranian Protests Held
The Iranian delegation, which also includes Foreign Minister Manuchehr Mottaki, is expected to return home on March 3.
Ahmadinejad’s trip, which comes ahead of Iranian parliamentary elections later this month, appears intended to reinforce the message that Tehran is a key regional power with the ability to play a role in Iraq.
Ahmadinejad’s visit is also seen as a show of Iranian support for al-Maliki’s government, whose main ally is Iran’s chief foe -- the United States.
Iran and Iraq fought an eight-year war that ended in 1988. Some 1 million people were killed.
But their political, economic, and religious ties are growing closer despite Tehran’s unhappiness with the continuing presence of some 150,000 U.S. troops in Iraq nearly five years after the U.S.-led coalition toppled Saddam Hussein.
Hussein's suppression of Iraq’s Shi’ite majority drove many of their leaders to exile in Iran, including Prime Minister al-Maliki, former Prime Minister Ibrahim al-Ja'fari, and Abd al-Aziz al-Hakim, the leader of the influential Islamic Supreme Council of Iraqi (ISCI) party.
U.S. Downplaying Visit
Trade is now growing between the two countries and tourism, in the form of hundreds of thousands of Iranian pilgrims to Iraq’s major Shi’ite shrines, is booming.
The United States has tried to downplay Ahmadinejad's visit. Washington says it welcomes Iran's stated policy of promoting stability, but says Tehran’s actions show it is doing just the opposite.
U.S. officials have repeatedly accused Iran of fomenting instability and giving logistical and material support to various Shi’ite militias in Iraq.
Speaking at the news conference with al-Maliki, Ahmadinejad brushed off such accusations. He said accusing others without evidence will only increase the problems in the region. He also said the people of Iraq "do not like America."
In an interview published on March 2 in the Spanish newspaper "El Pais," Ahmadinejad said he found it "normal" that the people of Iraq are fighting against the U.S. forces "occupying" their country.
Meanwhile, reports say scattered rallies were held in Baghdad and towns with sizable Sunni Arab populations to protest Ahmadinejad's visit.
"We denounce the Iranian president's visit to Baghdad," said Abd al-Rahman al-Zobaiei, who was among dozens of protesters in Al-Fallujah. "The people of Al-Fallujah have gathered here to express rejection by Al-Fallujah's people and all the Iraqis of this visit because of Iran's flagrant intervention in Iraq's internal affairs. We consider the Iranian government responsible for all the tragedies in Iraq."
Tehran and Washington are also at odds over Iran's nuclear program. The United States and other Western countries fear Tehran is trying to build nuclear weapons. The UN Security Council is currently considering a third set of sanctions against Iran over the nuclear issue. A vote could take place as soon as March 3.
RFE/RL Iran Report
SUBSCRIBE For regular news and analysis on Iran by e-mail, subscribe to "RFE/RL Iran Report."