OSLO, Feb. 15 (Xinhua) -- Iceland's Prime Minister Katrin Jakobsdottir said Friday she was disappointed at the decision of the United States to withdraw from the Paris Agreement on climate change.

At a meeting with visiting U.S. Secretary of State Michael Pompeo in Reykjavik, Jakobsdottir encouraged the United States to actively participate in the fight against climate change, according to a statement issued by the Icelandic government.

"In order to make progress in the fight against climate change, we need all states to participate in climate action. We are at a point where we must act. I encouraged Secretary Pompeo to participate in our efforts," Jakobsdottir said.

Emphasizing the importance of preventing another nuclear arms race, the Icelandic prime minister also conveyed her concern about the state of nuclear disarmament and the suspension of the Intermediate-Range Nuclear Forces (INF) Treaty.

She reiterated that according to Iceland's national security policy, Iceland should be free from nuclear weapons, subject to Iceland's international commitments.

Earlier on Friday, Pompeo discussed with Iceland's Foreign Minister Gudlaugur Thor Thordarson at a lunch meeting on trade, Arctic and security and defense.

At their meeting, it was decided to establish an annual Economic Dialogue between Iceland and the United States, involving public and private sectors, with the aim of further enhancing bilateral trade and investment between the two countries.

"This is a very important milestone, in line with Iceland's policy of strengthening our business relations with the United States," Thordarson said. "They are our largest and most important single market, as the annual total trade between the two states in goods and services amounts to around 3 billion U.S. dollars."

They also discussed human rights and Arctic affairs, as Iceland will take over the presidency of the Arctic Council in May.

At a joint press conference with Pompeo, Thordarson said Iceland wants to see the Arctic sustainable not only when it comes to the environment but also economically and socially.

"It's very important that we see Arctic in the near and distant future as a peaceful, low-tension area," Thordarson said. "That's what we will work with the U.S. and other partners to see that it will happen."