Outgoing President Mohammad Khatami also said on Sunday that the visit of al-Jaafari - whose arrival in Iran on Saturday was the first by an Iraqi prime minister since Saddam Hussein's ouster in 2003 - would be a turning point in bilateral relations between the two countries.
"The security and stability of both countries are inter-related," state-run radio quoted Khatami as saying upon meeting al-Jaafari.
"Tehran will do its utmost for the restoration of stability and security" in Iraq, said pro-reformist Khatami, whose eight-year tenure ends in early August.
Al-Jaafari, who is leading a delegation of more than 10 Cabinet ministers to Iran, is expected to sign a security agreement in the Persian state.
"Today, we need a double and common effort to confront terrorism that may spread in the region and the world," said al-Jaafari.
"Today, we need a double and common effort to confront terrorism that may spread in the region and the world"
The agreement follows intense Iraqi efforts since Saddam's fall to build closer ties with Iran and heal scars left by the 1980-88 war between the two countries that killed more than one million people on both sides.
Khatami, who is being replaced by Mahmoud Ahmadinejad on 6 August, said supporting a free, advanced and stable Iraq was a strategic Iranian policy.
"I hope the visit would be a turning point in bilateral relations and compensate for the damage inflicted by Saddam Hussein, the former Iraqi dictator, in the past," Khatami said.
Al-Jaafari, who spent more than a decade in Iran fighting Saddam's forces, said he was aware of Saddam's atrocities to neighboring countries.
"Saddam was not a real representative of the Iraqi nation," said al-Jaafari.
US and Iraqi officials have previously called on Iran to better guard its borders and prevent militants entering Iraq to fight American-led coalition and Iraqi security forces.
Relations between Iraq and Iran remained cool after their eight-year war, with Iran supporting anti-Saddam groups and the former Iraqi leader hosting the Mujahedeen Khalq, an Iranian militia that fought the clerical establishment in Tehran.
Iran has already played host to
Iraqi Defence Minister al-Dulaimi
However, since the US-led invasion swept Saddam out of power, Iraq's majority Shia community has risen to power and worked to build close ties with Iran, a Shia-dominated republic.
In a commentary, the radio said "the impact of boosting relations between the two countries should not just be limited to Iran and Iraq. Formation of new relations promotes peace, stability and convergence in the strategic region of the Gulf. It paves the way for a new round of cooperation."
Some Sunni Arab leaders, including the king of Jordan, have voiced fears over the emergence of a Shia-led Iraqi government with close ties to Iran, suggesting it could lead to the creation of a "Shia crescent" in the Gulf region that would unsettle political and social balances.
Al-Jaafari's trip is the first by a top Iraqi official to Iran in more than a decade. In 1991, shortly before the Gulf War began, Izzat Ibrahim al-Duri, vice-chairman of the Revolutionary Command Council and the second man in command, had visited Tehran.
Before the US-led invasion of Iraq more than two years ago, al-Jaafari had spent more than two decades in exile.
One of the top leaders of the Islamic Dawa Party, al-Jaafari fled to Iran in 1980 and remained there until 1990, organising cross-border attacks while studying Shia theology in the city of Qom.
Upon his return to Iraq, al-Jaafari became a key member of the United Iraqi Alliance, a Shia-led political coalition which in turn appointed him as the choice for prime minister.