Washington: US Defense Secretary Leon Panetta has met his British counterpart, Phillip Hammond, to discuss a wide range of issues including relations with Pakistan Afghanistan and Iran besides naval defence cooperation.

This was the first meeting between the two Secretaries, during which they spent a good part of their meeting discussing innovative approaches to defense in an era of fiscal austerity.

They agreed on Thursday that NATO must continue to invest in military capabilities despite the imperative to achieve fiscal discipline.

"The Secretaries also discussed ongoing operations in Afghanistan, as well as planning for transition to Afghan security lead.

"They touched on multiple regional issues, to include relations with Pakistan and the threat of a nuclear armed Iran," the Pentagon Press Secretary, George Little, said.

"Secretaries Panetta and Hammond signed a Statement of Intent on Carrier Cooperation and Maritime Power Projection that will serve as the framework for increased cooperation and interoperability on the use of aircraft carriers, as well as provide the basis for the US     to assist the UK Royal Navy in developing its next generation of aircraft carriers," Little said.

This cooperation is a cutting-edge example of close allies working together in a time of fiscal austerity to deliver a capability needed to maintain our global military edge, he said.

Little said Panetta and Hammond discussed the new US defense strategic guidance and compared notes on the UK's recent experience with its Strategic Defense and Security Review.

"They spent a good part of their meeting discussing innovative approaches to defense in an era of fiscal austerity, and agreed that NATO must continue to invest in military capabilities despite the imperative to achieve fiscal discipline," he said.

(Agencies)