Venezuelan President Hugo Chavez and Colombian President Alvaro Uribe have "decided to turn the page" after weeks of tension over a diplomatic row.
Chavez (left) gave Uribe a red-carpet reception in Caracas
Mr Chavez said he and Mr Uribe had cleared things up in a meeting that lasted more than four hours.
Venezuela froze links with its neighbour last month after Colombian officials admitted paying to help catch a Colombian rebel leader in Venezuela.
Ties had improved since Mr Uribe vowed to respect Venezuela's sovereignty.
The Caracas talks, first scheduled for earlier this month, had been delayed because Mr Uribe had an ear infection.
After weeks of tensions, Mr Chavez warmly greeted Mr Uribe on the tarmac of the airport in the Venezuelan capital.
He was later seen putting his arm around Mr Uribe's shoulder at the Miraflores presidential palace.
"We have turned the page now to settle what was left undone, speed up accords that were delayed or halted, and clear up things that were confused," Mr Chavez said at a joint press conference with Mr Uribe after the meeting.
He also said that commercial and trade agreements that had been frozen during recent weeks would be "reactivated".
Mr Uribe said he and Mr Chavez "have a commitment" to increasing security along their shared border.
"We are dedicated to fighting terrorism, in any form," Mr Chavez added.
They both acknowledged Cuban President Fidel Castro, and the leaders of Peru and Brazil, for their roles in lowering tensions between the two neighbours.
Colombia paid mercenaries to capture Granda
The dispute with Venezuela arose after Colombia admitted that it had paid bounty hunters who had captured a Colombian Marxist rebel leader in Caracas.
Rodrigo Granda, a commander in Colombia's largest left-wing rebel group, the Revolutionary Armed Forces of Colombia (Farc), was kidnapped in Caracas in mid-December.
Venezuela - which blames the US for provoking the crisis - accused Colombia of violating its national sovereignty and demanded an apology.
Colombia - a strong US ally - asked how Granda was able to attend a left-wing conference in Caracas at the time and get a Venezuelan passport.
Caracas severed both diplomatic and business ties - worth an estimated $1.7bn (£900m) last year - and cast doubt on the future a $200m natural gas pipeline project between the two nations.
In late January, the Colombian leadership issued a statement assuring Venezuela that the incident would not be repeated.
Earlier this month, Mr Chavez said he regarded the dispute as "practically over".