Yemen says that Saudi Arabia has agreed to stop building a fence along their common border.
President Saleh reminded Saudi Arabia that he was upholding the 2000 treaty
Yemeni Foreign Minister Abubakr al-Qirbi said the two countries had agreed to strengthen co-ordination efforts of controlling their joint border.
This follows a meeting between President Ali Abdallah Saleh of Yemen and Saudi Crown Prince Abdullah.
Yemen said the fence that Saudi Arabia began building six months ago violated a border treaty signed in 2000.
The treaty settled a long-standing dispute between the two countries by setting aside a 20km(12 miles) buffer zone on either side of the border.
'Confident of working together'
Saudi Arabia began building the fence to tighten border controls after a surge of militant attacks including the suicide bombings in the capital Riyadh that killed more than 50 people last year.
And in the past year, Saudi security forces have seized explosives, surface-to-air missiles and grenade launchers.
Last week security officials from Saudi Arabia and Yemeni held two days of talks in the Saudi city of Jeddah over the fence.
President Saleh who on Tuesday made the visit to neighbouring Saudi Arabia to try to diffuse the situation, said that his country upheld the treaty between their countries and hailed it as a model for solving border disputes.
Mr Qirbi said that in Wednesday's discussions between the leaders of the two countries had maintained their position of fighting terrorism.
"Were are both confident that if we work together and focus in the areas that threaten the security of both countries, we will achieve the results we want."
Mr Qirbi said that both countries have also agreed to abide the treaty signed in 2000.