At the end of a rare visit to Egypt, a senior Iranian envoy said Tuesday the two regional Muslim heavyweights are making progress in normalizing diplomatic relations, cut nearly three decades ago over regional policy disagreements. "There is no major problem and everything is moving forward," Ali Larijani, from Iran's powerful National Security Council, said after talks here with Egyptian Foreign Minister Ahmed Aboul Gheit. Larijani, who is also a close aide to Iran's supreme leader Ayatollah Ali Khamanei, described the talks as "positive and constructive." Teheran cut diplomatic ties after Cairo signed a peace agreement with Israel in 1979 and provided asylum for the deposed Iranian Shah Mohammad Reza Pahlavi. Iran's support for Iraqi Shi'ites, Lebanon's Hizbullah and the Palestinian terror organization Hamas has further deteriorated relations, resulting in very limited diplomatic contacts between the two countries. Egypt has always maintained that normal ties with Iran would come only after Iran stopped meddling in internal affairs of Arab countries. Larijani's visit comes amid a thaw between the two Muslim nations. It followed a visit last month to Teheran by Egypt's deputy foreign minister, Hussein Darar, and a preceding visit to Cairo in September by Darar's counterpart, Abbas Araghchi. In May, Iranian President Mahmoud Ahmadinejad offered to restore ties with Egypt, a strong US ally. At the time, Ahmadinejad said his country was ready to open an embassy in Cairo as soon as Egypt agreed to do the same in Teheran. The Iranian president has since repeated his offer, most recently last Wednesday. During an almost week-long stay, Larijani met with top officials, including Egypt's Intelligence Minister Omar Suleiman, Grand Sheik Mohammed Seyed Tantawi and other officials of Al-Azhar, Sunni Islam's prominent religious center. He also held talks with Amr Moussa, the head of the Cairo-based Arab League who urged better Arab ties with Teheran. There were also reports that Teheran has agreed to provide Egypt with badly needed wheat, at lower prices. However, some thorny issues still remain. Aboul Gheit has said that full diplomatic relations could only be restored if Iran takes down a large mural of former Egyptian President Anwar Sadat's assassin, Khaled el-Islambouli, and change the name of a street honoring him. El-Islambouli was one of the army officers who killed Sadat during a military parade in 1981. Egypt executed him by firing squad soon thereafter. Several times over the last few years, Teheran has said it would change the street name, but the image of el-Islambouli shouting behind bars marked with a Star of David continues to loom down over the street bearing his name. Larijani played down the issue at a press conference before leaving. "This is a side issue, we have talked about more important and essential ones," he said.