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 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.