DAMASCUS, (Reuters) – Syria and Iran put on a show of unity and defied U.S. Secretary of State Hillary Clinton on Thursday, dismissing her call on Damascus to loosen its decades-long alliance with Tehran.

President Bashar al-Assad and his Iranian counterpart Mahmoud Ahmadinejad signed a bilateral deal to remove travel visas and attended a Muslim ceremony in the Syrian capital.

Ahmadinejad’s visit came a day after Clinton said the United States was asking Syria “to begin to move away from the relationship with Iran”, and to stop supporting the Lebanese Shi’ite movement Hezbollah, which is also backed by Iran. “We must have understood Clinton wrong because of bad translation or our limited understanding, so we signed the agreement to cancel the visas,” Assad said.

“I find it strange that they (Americans) talk about Middle East stability and peace and the other beautiful principles and call for two countries to move away from each other,” he added.

Ahmadinejad told a joint news conference: “Clinton said we should maintain a distance. I say there is no distance between Iran and Syria.” He added: “We have the same goals, same interests and same enemies. Our circle of cooperation is expanding day after day.”

Support for Hezbollah forms the linchpin of the Syrian-Iranian alliance, formed 30 years ago despite ideological differences between the ruling hierarchy in the two countries.

Diplomats in Damascus said Syrian support for the group has been a main sticking point in the rapprochement between Syria and the United States, which started shortly after President Barack Obama took office in January 2009.

Assad backed Iran in its nuclear dispute with the West and said Western moves to exert pressure on Tehran constituted “neo-colonisation”.

The United States, along with other United Nations Security Council members and Germany, is discussing possible fresh sanctions on Iran because of suspicions it is seeking to build a nuclear weapon, which it strongly denies.

Relations between Syria and Iran improved after the 1979 Iranian revolution that brought Shi’ite clergy to power. Alone among Arab countries, Syria, whose ruling hierarchy is secular, supported Iran during the 1980-1988 Iraq-Iran war. But their alliance is being tested by Syrian moves to seek a peace deal with Israel and the possibility of an Israeli strike on Iran’s nuclear facilities.

Iran did not hide its displeasure at Syria’s participation in a 2007 U.S.-supervised Middle East peace conference in Annapolis, Maryland that it attended with Israel, prompting Syrian officials to emphasise that Syria was a sovereign country and not a proxy of Iran.

Syrian officials have also made it clear that while Syria is against any Israeli attack on Iran, Syria’s struggle with Israel does not mean it would be party to any hostilities between Tehran and the Jewish state.

Clinton told Senate members this week that Syria’s ties with Iran were “deeply troubling” to Washington and Syria must stop helping arm Hezbollah, an accusation Syria denies. She urged Syria to resume peace talks with Israel, saying Washington would consider doing anything that could resolve the stalemate between them. Indirect talks between the two, under Turkish mediation, broke down two years ago.

Diplomats said U.S. envoy George Mitchell raised the issue of Syrian backing for Hezbollah during a meeting with Assad last month. Obama has since nominated an ambassador to Damascus after a five-year absence and Undersecretary of State William Burns, the architect of a deal that rehabilitated Libya’s leader Muammar Gaddafi, visited Damascus this month.