Italian Prime Minister Silvio Berlusconi is visiting Libya for talks on how to tackle illegal mass migration from North Africa.
Italy says fewer migrants have arrived since expulsions began
More than 1,500 people have made the journey to the tiny Italian island of Lampedusa in the past week alone.
Italy has been criticised for expelling hundreds of migrants to Libya.
Mr Berlusconi and Libya's Colonel Muammar Gaddafi have also attended the opening of a 540km (335-mile) gas pipeline linking Libya with Sicily.
The pipeline, running under the Mediterranean Sea, was built at a cost of $5.6bn and will carry at least 280bn cubic feet (8bn cubic metres) of natural gas a year to Italian power plants.
"Because of this important project, Berlusconi interrupted his programme to share this celebration with us to announce that Libya and Italy are friends, they
co-operate, and they exchange joint benefits and not enmity," Mr Gaddafi said at the ceremony in Mellitah, western Libya.
Egyptians sent home
Mr Berlusconi and Mr Gaddafi were also expected to discuss a controversial plan to set up reception centres in North Africa to process migrants before they set out to sea in an attempt to get to Europe.
The Libyan Interior Minister, Nasser al-Mabruk, said his country had helped repatriate about 1,000 Egyptians after their controversial expulsion from Italy.
"Italian authorities asked Libyan authorities for their assistance ... Libya has accepted this demand and returned them back to Egypt through Libya," Mr Mabruk told reporters.
"They were returned on Italian flights and Italy is paying for the cost."
On Wednesday, the Italian authorities marched 400 handcuffed men onto military planes at Lampedusa airport and flew them to Libya and Tunisia.
The expulsions were triggered after more than 600 people arrived in one night on Lampedusa - the nearest geographical point of arrival in the European Union - from North Africa.
Mr Mabruk said Libya had expelled more than 40,000 immigrants recently.
Human rights campaigners say Italy's rapid expulsions have prevented genuine refugees from claiming asylum.
The United Nations refugee agency, UNHCR, said one of its representatives would be visiting the holding camp in Lampedusa, after the Italian government prevented earlier visits.
Rome has urged Tripoli to crack down on those responsible for smuggling migrants across the Mediterranean.
It has promised to give Libya equipment to detect and halt the boats, and pledged to help with training.
The situation was brought up during a visit to Tripoli by the French Foreign Minister Michel Barnier, ahead of a visit by French President Jacques Chirac.
Mr Chirac's visit would be the first by a French president in more than two decades, and is another sign of Libya's closer ties with the West.