The leaders of the Ilaje and Ijaw communities of Ondo State committed themselves to the resettlement of thousands of Ilaje people forced to flee their homes last year.

The BBC's Barnaby Phillips: The displaced Ilajes feel abandoned by the government

They also agreed not to enter the other group's territory to attack their people and to allow state security forces to patrol border points between the two sides.

Officials said the state and federal governments would begin the reconstruction of homes destroyed in the fighting.

A joint statement released after Wednesday's peace talks in the Ondo capital, Akure, said the leaders had agreed to set up a committee to find "ways and means to bring permanent peace to the area".

Oil dispute

Hundreds of lives were lost when fighting broke out in the area last September in a dispute over ownership of land believed to be rich in oil reserves.

The latest fighting, which erupted on Friday, is reported to have started when the Ilajes attempted to re-enter a town which the Ijaws took last September.

Much of the area where the conflict is taking place is only accessible by boat, making it difficult for the security forces to penetrate.

Poverty

The violence in Ondo is the latest in a series of ethnic clashes which have flared in various parts of Nigeria since the democratic government of President Olusegun Obasanjo took office at the end of May.

BBC Correspondent Barnaby Phillips says although many of these disputes revolve around local issues they share a common root cause of growing poverty.

At least 700 people are estimated to have been killed since the end of military rule on 29 May.