The leaders of Ethiopia and Somalia have agreed to hold “technical talks” to resolve a dispute sparked by Ethiopia’s deal with Somalia's breakaway region of Somaliland.

Somalia and Ethiopia said they would work together to resolve a dispute over Addis Ababa's plan to build a port in the breakaway region of Somaliland, which had drawn in regional powers and threatened to further destabilise the Horn of Africa.

Ethiopia and Somalia have agreed to end their bitter dispute over Addis Ababa's plans to build a port in the breakaway republic of Somaliland following talks in Turkey. Turkish President Recep Tayyip Erdogan welcomed the "historic agreement",

Ethiopia and Somalia agreed to lower tensions over a deal that would allow Addis Ababa to build a military base on the coast of the breakaway region of Somaliland in exchange for a stake in its national airline.

The new agreement comes even as sources close to US President-elect Donald Trump say his administration is likely to recognize Somaliland’s independence.

Ethiopia and Somalia reached an agreement Wednesday to end diplomatic tensions and to begin talks by February to iron out details over a controversial maritime access deal signed by Ethiopia with the breakaway Somalia region of Somaliland.

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Ethiopia and Somalia have agreed to engage in talks to end a year-long dispute that has been a significant source of concern in East Africa.