Vietnam's prime minister has become the first leader of the communist nation to meet and hold talks with the head of the Roman Catholic Church.
Nguyen Tan Dung is currently on a visit to Rome
Prime Minister Nguyen Tan Dung met Pope Benedict XVI at the Vatican in Rome.
The meeting was described by the Vatican as a "new and important step" towards establishing diplomatic ties.
For decades Vietnamese leaders saw the Church as an integral part of French colonialism, and later of South Vietnam's anti-communist government.
The Church, for its part, is still seeking the return of properties confiscated by the Vietnamese.
Vietnam has six million Roman Catholics - the second largest Catholic community in South East Asia after the Philippines.
The half-hour meeting between Nguyen Tan Dung and the Pope reportedly took place in the pontiff's private library.
"The Holy See expressed its satisfaction for the visit, which marks a new and important step towards the normalisation of bilateral relations," the Vatican said in a communiqué.
The Pope wants to improve ties with China as well as Vietnam
The Communist regime officially severed diplomatic ties with the Vatican in 1975, at the country's reunification following the Vietnam war.
But relations have improved since 1990, with regular visits by Vatican cardinals to Vietnam.
In the last few years, the Church has even been allowed to appoint new bishops and priests, although all such appointments still have to be approved by the communist authorities.
But the Church is still seeking the return of belongings confiscated in the past, and is looking for permission to run its own schools and other social programmes in Vietnam.
The BBC's Bill Hayton in Hanoi says there are signs that the government is prepared to give ground on these issues, not least because it needs help dealing with the social problems generated by rapid economic growth.
For the Vatican, good relations with Vietnam are also a sign that they might also be able to reach some agreement with China's Communist leadership,
China has so far proved less ideologically flexible than their counterparts in Hanoi.