Jalal Talabani, speaking to members of a Turkish-Iraqi joint business group, also called on Turkish businesses to invest in Iraq, saying increased oil revenues had now put his country in a position where it was able to meet payments.
"We want to forge strategic relations in all fields including oil, the economy, trade, culture and politics," Talabani said.
During a meeting with Prime Minister Recep Tayyip Erdogan, Talabani suggested that both countries set up a body whose aim would be to strengthen ties between the neighbors. "Let's set up a high council whose aim would be to develop and oversee relations," Talabani said. "This council could be headed by the prime minister or the foreign minister."
Talabani, a Kurd, arrived in Turkey on Friday to allay tensions caused by Turkey's military operation against Kurdish rebels who launch attacks on Turkey from bases in northern Iraq. the offensive ended a week ago.
Some had feared the incident could lead to a wider conflict between the two U.S. allies.
Talabani said Kurdish rebels would not be tolerated inside its borders, and said Iraq was continuing to put pressure on them to lay down their arms.
Turkey is concerned that the example set by the Iraqi Kurds, who run a virtual mini-state within Iraq, could encourage Turkey's Kurdish population to seek a similar arrangement.
During Turkey's ground incursion, Iraq demanded an immediate withdrawal and warned of the potential for clashes between Turkish troops and security forces of the semiautonomous Kurdish region in northern Iraq. The Turkish military, which is receiving U.S. intelligence, said it inflicted heavy losses on a large group of rebels in Iraq's Zap region. The PKK has disputed the claim.
The PKK has said it wants political and cultural autonomy for the predominantly Kurdish region of southeastern Turkey. The conflict started in 1984 and has killed tens of thousands of people.
On Saturday, Iraq's oil minister said his government will not recognize any oil deals that the northern Kurdish self-governing region has unilaterally inked with foreign companies. "The central government is in charge of the administration of natural resources and agreements not approved by the central government will not be recognized," Iraq's oil minister Hussain al-Shahristani said after a meeting with Turkey's Energy Minister Hilmi Guler.
The Kurdistan Regional Government has approved several contracts with international companies, causing tensions with the Iraqi government, which is seeking centralized control over the country's oil resources.
Guler said the two discussed projects to transport Iraqi oil and natural gas to Turkey. "We want to give gas to Turkey and we see it as a transit country," the state-run Anatolia news agency quoted al-Shahristani as saying.
Turkey buys oil from Iraq through a twin pipeline running from northern Iraq to a Turkish Mediterranean port. The United States supports plans for a gas pipeline from Iraq to Turkey to help meet Europe's growing energy demands.