This was Terzic's first visit to Zagreb, although he and Sanader met many times on the fringes of multilateral conferences.
Speaking of the property rights agreement, Terzic said it envisaged the equality of the two countries and voiced hope it would be signed in September during Sanader's visit to Sarajevo.
Asked why the Bosnian Serb entity was against the agreement, Terzic said the important thing for him was that the entity's directorate for property rights relations was not against it.
The entity's president, Dragan Cavic, said yesterday the agreement did not cover the status and restitution of property belonging to Croatian Serb refugees who currently live in the Bosnian Serb entity.
"There is indeed fear, but the important thing is that the reasons are not political. We'll have understanding for financial and economic reasons," said Terzic.
Sanader said he was very satisfied the document had been agreed after 10 years of negotiations.
The dual citizenship agreement was signed by Croatian Interior Minister Ivica Kirin and his Bosnian counterpart Safet Halilovic. The draft agreement regulates all issues as well as the status of people who already have or will acquire dual citizenship. People who already have dual citizenship will keep it after the agreement is ratified in the two countries' parliaments.
Sanader and Terzic told reporters the outstanding issues between the two countries stemmed from the break-up of the former Yugoslavia, including the border issue. They supported the Croatian-Bosnian commission for the verification of the state border.
Terzic said the state border agreement was drafted in line with an agreement reached by former presidents Alija Izetbegovic of Bosnia and Franjo Tudjman of Croatia.
He added the agreement would be sent to parliament for ratification.
Sanader too said the agreement would be sent to parliament for ratification, and voiced satisfaction that the issue of one of the longest borders in Europe was being settled without problems.
The agreement was drawn up in line with the Badinter commission's principles from 1991.
In a joint statement adopted after the meeting, Sanader and Terzic supported the reforms two countries were undertaking in order to join Euro-Atlantic institutions.
Sanader voiced confidence Croatia and Bosnia would share a future in Europe, while Terzic said that Croatian-Bosnian relations "should be seen through the prism of integration" with the EU, and not through the prism of the disintegration of the ex-Yugoslavia as until now.
Bosnia is expected to sign a Stabilisation and Association Agreement with the EU on the tenth anniversary of the Dayton peace agreement later this year.
Terzic said that Bosnia would sign free trade agreements with other countries as it had done with Croatia. He added Bosnia did not want to endanger the fact that it was Croatia's biggest export market.
The two prime ministers also discussed the status of the Bosnian Croat people. Terzic was asked to see to it that Bosnian Croats retain the status of a constituent and equal people in the new constitution.
Sanader and Terzic also briefly addressed cooperation in the Croatian port of Ploce. Sanader announced Croatia would soon start the realisation of the European corridor 5C.
Terzic was also received by President Stjepan Mesic. They agreed the number of outstanding issues between the two countries was decreasing.