The presidents of Colombia and Venezuela have agreed to restore diplomatic ties after a dispute over allegations that Caracas shelters Colombian leftist rebels.

Presidents Juan Manuel Santos of Colombia and Hugo Chaves of Venezuela agreed to "relaunch bilateral relations and re-establish diplomatic ties between the two countries based on transparent and direct dialogue," a joint statement issued after Tuesday's meeting said.

The two leaders expressed optimism that their first meeting would produce positive results.

Santos said he also received assurances from Chavez that the Venezuelan leader would not allow guerrilla groups to set up camp inside his borders.

Chavez severed diplomatic relations with Colombia on July 22 after the government of Alvaro Uribe, Santos' predecessor, publicly presented photos, videos and maps of what it said were camps inside Venezuela that belonged to the Revolutionary Forces of Colombia (Farc) rebel group.

Chavez accused Uribe of lying and trying to stir up a conflict in his final days in office.

Al Jazeera's Teresa Bo, reporting from Santa Marta said that the topic Venezuelan support for the Farc was not discussed.

"It is a very sensitive topic at this point in time, and this meeting was mainly a common pledge to restore diplomatic relation between the countries."

Trade between the neighbouring countries had already fallen dramatically in the past year as relations deteriorated.

Tense relations

Relations between Colombia and Venezuela already suffered in July 2009, when Chavez froze ties after Bogota agreed to give the United States access to seven military bases to fight cocaine production and trafficking.

Colombian foreign minister Maria Angela Holguin said the leaders were likely to discuss the bases, but that the sensitive issue of  the alleged presence of the Farc leadership on Venezuelan soil was unlikely to arise yet.

More immediate concerns of the return of ambassadors and the reopening pf borders to bilateral trade were expected to be the main focus.

Trade between the South American neighbours - $6bn in 2008 - fell precipitously during the dispute,  hurting economies on both sides of their 2,000km border.