As the two met Japanese diplomats said Tokyo was keen to have an update on Pakistan's investigation into the dismantled nuclear proliferation network of country's disgraced nuclear scientist Abdul Qadeer Khan.

The diplomats said Tokyo would like to be "updated" on the extent of Khan's involvement with North Korea when he ran the illegal network to sell nuclear secrets to other countries.

Pakistan has said it fully supports a nuclear free Korean peninsula and a reduction of tensions in the far east.

Officials said Musharraf and Koizumi spoke together for 20 minutes and continued the discussion later at a working luncheon.

Koizumi, who flew here after two nights in India where he pledged closer economic and security ties, was to hold formal talks focusing on bilateral trade and economic relations with Prime Minister Shaukat Aziz later in the day.

Details of the Musharraf-Koizu-mi meeting were not immediately available but a Japanese diplomat said Tokyo wanted to raise relations with Pakistan to the level of a strategic partnership.

"There is going to be a joint declaration that will mark a new phase of strategic relations between Japan and Pakistan," the diplomat said.

During his visit, the first by a Japanese prime minister in five years, Koizumi is expected to announce a resumption of yen-denominated loans, suspended by Tokyo in 1998 after Pakistan conducted nuclear tests.

Before the tests, carried out in response to similar trials by India, Japan had given Islamabad 500 million dollars annually in development aid.

Koizumi will oversee the signing of three agreements including grants worth 87 million dollars for a water purification project and an irrigation scheme.

The two sides will also conclude a technical cooperation agreement.

"This is a very important visit. We have enjoyed close friendly relations with Japan which is a major trading and investment partner with Pakistan," Pakistani foreign ministry spokesman Jalil Abbas Jilani told AFP.

The Japanese leader's regional tour is seen as a diplomatic thrust by Tokyo to consolidate links with India and Pakistan to counter-balance China's growing influence in the region.

Pakistan is a close ally of China which is building a deep sea port at southwestern Gwadar town and has agreed to help construct a second nuclear power station in the country.