MercoPress. South Atlantic News Agency

Chavez and Uribe smoke the peace pipe.

Venezuela and Colombia proclaimed Tuesday the end of an often-rough neighbourly relation which had recently escalated following reciprocal recriminations involving the recent kidnap/capture of a key Colombian guerrilla leader in Venezuelan territory which was handed to Bogotá by bounty hunters.

"We've turned the page" said Venezuelan President Hugo Chavez during a joint press conference with his Colombian counterpart Alvaro Uribe, after having met privately for more than four hours in Caracas presidential palace.

Mr. Uribe added that the two sides were able to surmount the impasse over the guerrilla's capture thanks to "mutual trust" and to the presidents' "commitment to maintaining more agile communications".

Both presidents highlighted their commitment to collaborate in the fight against terrorism, and President Uribe acknowledged that Bogotá approach to the problem sometimes "engenders difficulties for the neighbours."

"It's a Colombian problem that, with the help of God, we must overcome" without infringing on the sovereignty of other nations, he added in reference to Venezuela's complaints about the capture of the guerrilla in its territory.

They thanked several regional leaders for their mediation efforts in the dispute including Cuba's Fidel Castro, Brazilian President Luiz Inacio Lula da Silva and Ricardo Lagos from Chile.

The two presidents agreed to reactivate all bilateral accords suspended by Mr. Chavez last month at the height of the crisis. Among the areas now benefited will be trade and joint infrastructure projects, most prominently a plan for building a natural gas pipeline linking the two nations.

A joint communiqué issued at the end of the summit said the two leaders instructed their foreign ministers to form a high-level bi-national commission to promote cooperation between the Andean neighbours.

The new panel will meet before the end of March and will address "evaluating relations between the two countries, the impact of the recent fortunately surmounted crisis, and actions to strengthen the process of integration".

The main purpose of Tuesday's summit, which was originally set for last week but postponed when Mr. Uribe fell ill, was to close the book on a serious diplomatic dispute following the December capture in the Venezuelan capital of the so-called "Foreign Affairs minister" of the Revolutionary Armed Forces of Colombia, or FARC.

Whereas the Venezuelan government complained that Rodrigo Granda had been kidnapped in Caracas in violation of the nation's sovereignty, Bogotá insisted the guerrilla had been legitimately captured by bounty hunters and taken to the border, where he was arrested by Colombian authorities.

The dispute led President Chavez to withdraw his ambassador in Bogotá, suspend bilateral agreements and demand a public apology from President Uribe.

The Colombian government did not come through with a full-fledged apology, but it said after several days of mounting tension and suspended trade ties that it "was completely willing to review events ... so that if they have proven inappropriate in the eyes of the Bolivarian Republic of Venezuela, they will not happen again." At one point, the United States was drawn into the spat, feeling obliged to deny Venezuela's allegations of CIA involvement in the capture of Granda.

Besides rebutting those claims, the U.S. State Department issued a statement in late January demanding that Venezuela take steps against a dozen or so Colombian rebels said to enjoy the haven hospitality of the Chavez administration on a regular basis.

Claims of sympathy for Colombian Marxist insurgents, who have been waging a four-decade-old conflict against a succession of elected Colombian governments, have been levelled at the populist Mr. Chavez since shortly after he was elected president for the first time in late 1998.

Washington enjoys excellent relations with Uribe, whom it considers a close ally in the war on terrorism and drug trafficking, while ties with Venezuela have been strained for most of Chavez's time in office.