U.S. Secretary of Defense Donald Rumsfeld delivers his keynote speech at the 5th Asia Security Summit, Saturday, June 3, 2006 in Singapore

The U.S. Secretary of Defense has said that Iran's support for terrorism makes it an unusual participant in a regional group led by China and Russia. Speaking at an international gathering of defense officials, Donald Rumsfeld also urged China to be more open about its military spending.

Defense Secretary Donald Rumsfeld said Iran is the world's leading terrorist nation, and expressed surprise that it has been invited to the Shanghai Cooperation Organization.

"It's supporting Hamas, it's supporting Hezbollah, it has a long record of being engaged in terrorist activities and to think that they should be brought into an organization with the hope that it would contribute to an anti-terrorist activity strikes me as unusual," he said.

The Shanghai Cooperation Organization includes China, Russia and several Central Asian countries, and among other goals, it aims to fight terrorism. Iran's president has been invited to observe the group's meeting in Shanghai later this month.

Rumsfeld made the comments Saturday at the Shangri-La Dialogue, a private security conference in Singapore attended by defense officials from 23 countries.

In his comments, Rumsfeld also urged Beijing to be more open about its defense budget.

"A lack of transparency with respect to their military investments understandably causes concerns for some of their neighbors," he said.

Rumsfeld said greater openness would benefit China, because its neighbors and trading partners would be more confident about investing in the country if they knew more about its military intentions.

He did not, however, mention a recent Defense Department report on China's military buildup. The report, released last month, said that the United States is concerned about Beijing's military spending because it appears aimed at developing the ability to project force beyond its immediate surroundings.

China has called Washington's concerns groundless and says it is very open about the rapid increase in its defense spending.

The secretary also suggested that North Korea become more open and imitate Libya by giving up weapons of mass destruction and rejoining the "community of nations."

Rumsfeld had praise for the presidents of both Pakistan and Afghanistan, saying both had difficult jobs in helping fight the war on terrorism and lead their countries.

And he was enthusiastic about increasing military cooperation among Asian nations in fighting terrorism, sea piracy and other shared threats. He said the United States welcomes the expanding cooperation.