Sudanese President Omar al-Bashir and his Southern counterpart Salva Kiir met alongside African Union mediator Thabo Mbeki while tensions remain high after the latest in a string of accusations that Khartoum had bombed South Sudan.
Ethiopian Prime Minister Hailemariam Desalegn, who is hosting the talks, also attended the first meeting between the former civil war foes for over three months, when they signed a raft of key deals that have yet to be implemented.
Ahead of the meeting — taking place in Ethiopia’s presidential palace — Bashir, Kiir, Hailemariam and Mbeki were seen sitting together talking and laughing.
The talks are expected to carry into the afternoon, although while the leaders are set to leave later on Saturday, diplomats say talks could continue Sunday if an agreement is not reached.
Delegations from Juba and Khartoum were also present, including defence ministers from both countries.
Bashir and Kiir arrived in Ethiopia on Friday, one day after South Sudan accused Khartoum of waging fresh attacks along their disputed border, but they first met separately only with mediators.
The summit of the leaders, whose nations are both struggling with economic austerity cuts following Juba’s halting of oil exports through Sudan’s pipelines, is the latest of repeated rounds of AU-mediated talks.
Along with a demilitarised border buffer zone, the September pacts allowed for a resumption of South Sudanese oil exports through Sudan. They also said border points would be reopened for general trade.
Also on the agenda is the contested Abyei region, a long-time flashpoint on the volatile border, which has proved to be one of the most contentious sticking points between the two nations.
Sudanese troops withdrew from the territory in May after a year-long occupation that forced over 100,000 people to flee towards South Sudan.
The Lebanon-sized area is now controlled by United Nations peacekeepers from Ethiopia.
South Sudan separated from Sudan in July 2011 under a peace agreement that ended a 1983-2005 civil war, but key issues including the demarcation of border zones that cut through oil-rich regions remain unresolved.