Italy and Iran signed billions of dollars worth of business deals with Iran on Monday, as President Hassan Rouhani makes the first Iranian state visit to Europe in 16 years.

Rouhani is leading a 120-member delegation for five days of meetings in Rome and Paris, designed to strengthen ties with the West after years of economic sanctions, which were lifted last week.

Italian Prime Minister Matteo Renzi said: “This is just the beginning of a journey. There are sectors where we must work closer together.”

Renzi also commented on the challenge from Islamic State, who oppose Iran and the West equally:

“I am sure this visit will be a fundamental part of our ability to overcome together the challenge of fighting terrorism, atrocity and evil that we all have to confront together.”

Rouhani added, speaking through a translator: “We have always been in the front line against terrorism … we have to continue to secure a genuine peace in Afghanistan, Syria, Lebanon, Libya.”

Italian business leaders, including those from energy firm ENI and carmakers Fiat Chrysler, attended a state dinner with the Iranian President on Monday. Among the deals struck were a pipeline contract worth between $4 billion and $5 billion for oil services group Saipem, up to 5.7 billion euros in contracts for Italian steel firm Danieli and up to 4 billion euros of business for infrastructure firm Condotte d’Acqua.

Iran announced plans at the weekend to buy more than 160 European planes, mainly from Airbus, a major step forward for ordinary Iranians, many of whom opposed the deal that led to the lifting of economic sanctions. Since the 1979 revolution, which brought Islamic clerics to power, Iran has struggled to buy planes and spare parts from the West, causing delays for many Iranian passenger flights as ageing planes are repaired.

On Saturday, Iran and China signed 17 agreements on a range of issues from energy to boosting trade to $600bn.

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