Bajnai is the first prime minister to visit Croatia since Kosor stepped into office in July 2009.

"Cooperation between our two countries is an example of good neighbourly relations, the building of bridges and a true cooperation," Kosor said.

Bajnai said Hungary was Croatia's loyal neighbour and a country that supports Croatia, adding that all political parties in Hungary advocate that Budapest must support Croatia politically and economically.

Kosor thanked Hungary on the support to Croatia's NATO and EU memberships.

The talks also focused on economic cooperation, notably the energy sector.

"On behalf of the Croatian government, I expressed full support to the construction of a gas pipeline interconnection between Croatia and Hungary because in our opinion this would enable a better flexibility of the gas system," Kosor said.

The interconnection, with capacity of 6.5 billion cubic metres, is expected to become operational in mid 2011. The investment is worth EUR 100 million. Half of the amount will be covered by Hungarian investors and the other half by the European Union, Bajnai said.

Kosor expressed hope more Hungarian tourists would visit Croatia this year. She added she would meet her Hungarian counterpart again on 24 and 25 February at the Danube conference in Budapest and at the energy summit, also held in Hungary's capital on 25 and 26 February.

Kosor said the talks also focused on the Sisak oil refinery. Bajnai refuted speculation that the refinery was going to shut down. He said more money would be invested in the refinery's development. Kosor said she expected INA to submit an accident report. A fire broke out in Sisak refinery on Saturday evening after the company's system for the drainage of oiled water became clogged up, which led to the spilling of the water and the spreading of evaporated hydrocarbon which began to burn, causing explosions and fires. The fire was extinguished late in the evening. There were no casualties.

Asked if Hungarian institutions would forward to the Croatian State Prosecutor's Office and the Croatian Financial Services Supervisory Agency (Hanfa) documents pertaining to Podravka's deposits in the OTP bank in Hungary, Bajnai said the documents were forwarded to Croatia on Friday.