Bolivia and Libya agreed Wednesday to establish diplomatic relations and join efforts to develop the nations' energy resources.

Bolivian Foreign Minister David Choquehuanca said the two countries signed a memorandum to set up diplomatic ties during a meeting with Libyan officials in La Paz.

Choquehuanca said Bolivia, which has large natural gas reserves, also wants help from oil-powerhouse Libya in developing its energy sector.

For decades, the U.S. had Libya on a list of state sponsors of terrorism and imposed sanctions. But relations improved after Gadhafi's surprise decision to dismantle Libya's clandestine nuclear program. Washington restored full diplomatic relations with Libya in 2006.

Leftist Bolivian President Evo Morales established diplomatic relations with Iran last September, generating concern in Washington, which has tense relations with Tehran.

On Wednesday, Iranian President Mahmoud Ahmadinejad sent a personal messenger to La Paz to congratulate Morales on his win in Sunday's recall referendum.