Chinese Premier Wen Jiabao wrapped up a visit to Iceland on Saturday, the first stage in a four-nation European tour, after concluding an accord on cooperation in the oil-rich Arctic region.

A geologist by training, Wen visited the Hellisheidarvirkjun geothermal plant on a volcanic ridge near Reykjavik on Saturday, accompanied by Icelandic Foreign Minister Ossur Skarphedinsson.

China and Iceland have a partnership, through the Orka Energy and Sinopec companies, to develop geothermal energy in China.

The premier voiced "strong support" for moves to develop geothermal energy in his own country. A day earlier, both countries signed a cooperation deal on the geothermal cooperation, as part of a package of six agreements.

Another agreement covered cooperation in the oil-rich Arctic region.

The talks, during what is the first visit by a Chinese premier to Iceland, also yielded accords covering cooperation in marine and polar science and technology and solar energy.

The Chinese leader earlier thanked Iceland President Olafur Ragnar Grimsson for backing his country's request for permanent observer status on the Arctic Council, an eight-country inter-governmental forum.

China currently has simple observer status on the council grouping Iceland, Denmark, Norway, Sweden, Finland, Russia, Canada and the United States.

His European tour will also take him to Sweden, Poland and Germany.

Skarphedinsson told reporters Friday that Reykavik had always considered China a "clear" candidate for permanent observer status on the council.

But Grimsson and Prime Minister Johanna Sigurdardottir also said they raised the question of human rights in China with Wen.

The president praised Wen's "reform initiatives" and said he "encouraged cooperation and dialogue" on human rights between Chinese and Islandic intellectuals and organisations.

Wen replied that "the Chinese authorities wanted to support such cooperation and such a dialogue on human rights with the Islandic people," the presidency statement said.

Hundreds of people attended two demonstrations in Reykjavik on Friday to protest Chinese repression in Tibet and Beijing's crackdown on the Falungong spiritual movement.

In an interview Saturday with state radio, Sigurdardottir said: "I told (Wen) of the importance of human rights issues to the Islandic people. I also told him how I viewed human rights in China."

She added, without elaborating: "He's a reformer. We know it, and I wasn't disappointed by his response."

The prime minister said Wen had been "open and positive" in response to the idea that Iceland could help China in the area of gender equality.

Earlier Saturday, Wen toured the Thingvellir national park and saw the Gullfoss falls and the geyser of Geysir -- the origin of the word.

China's interest in Iceland came to the fore last year when a Chinese property tycoon tried to buy a large swathe of land in the north of the country for a tourism project.

Some observers suggested that property magnate Huang Nubo's purchase would help China win a foothold in the Arctic amid general concern over Chinese investment in Europe.

That deal was eventually blocked by the Icelandic government, after officials said China had mooted using the island as a trans-Arctic shipping port.

Retreating ice has opened up the potential for a shorter cargo shipping route with Asia, which would cut the sea voyage between Shanghai and northern Europe by some 6,400 kilometres (4,000 miles).

Wen is set to leave Iceland on Sunday for Germany where he will attend the Hanover Messe, the world's biggest industrial fair, with Chancellor Angela Merkel.