President Bush met Mongolian President Natsagiin Bagabandi (search) in the Oval Office on Thursday and thanked him for sending peacekeepers to Iraq and helping rebuild Afghanistan.

"The United States and Mongolia agreed to continue working to advance Mongolia's contribution to international peacekeeping efforts," said a joint statement by the two nations.

The United States also welcomed the recent elections in Mongolia (search), which is sandwiched between Russia and China, as evidence of the nation's commitment to democracy.

Last week, however, Mongolia's new parliament called off its first session after ruling party lawmakers refused to show up because of a dispute over recent elections, in which they lost their majority.

The ruling Mongolian People's Revolutionary Party (search), which led Mongolia under communism, won only 36 seats in the June 27 election -- a sharp setback for the party that won 72 out of 76 seats in 2000.

Bush said he was confident that the election process would be successfully resolved "in a free, fair and transparent manner consistent with Mongolia's constitution."

Bush and Bagabandi also noted their shared support for dismantling nuclear programs on the Korean Peninsula. The two presidents agreed to promote bilateral trade and investment and noted the signing of a trade agreement during Bagabandi's visit.