Syria and Iraq are to work together to improve security along their border, amid concerns that foreign insurgents have been entering Iraq from Syria.
Syria has not formally recognised the Iraqi government
Iraq's interim Prime Minister Iyad Allawi said a joint committee would look at how better to control the 600km (370-mile) border.
The move is being seen as a sign that years of hostility between the nations are giving way to a new start.
Mr Allawi is on a regional tour to seek support from Iraq's neighbours.
He has already been to Egypt and Jordan and will be heading to Lebanon on Sunday, followed by Saudi Arabia and Kuwait.
"Syria has seen terrorism in earlier days, even by the old regime in Iraq when Saddam tried to inflict a lot of damage on the Syrian people and kill a lot of Syrian civilians. Now it's time for us to close ranks," Mr Allawi said.
Return of assets
The BBC's Kim Ghattas, in Beirut, says that, at least officially, the Syrians and their Iraqi guests reached an agreement on all the issues that were on the agenda.
It is unclear how Damascus proposes to better control its border with Iraq, our correspondent says.
But Syrian Prime Minister Naji el Otri assured Iyad Allawi that Syria was opposed to any cross-border infiltration.
The two sides also reached an agreement in principle on the return of Iraqi assets frozen in Syrian banks since the toppling of Saddam Hussein's regime.
They are estimated to be anywhere between $500m to $1bn.
Mr Otri said: "We have affirmed during the meeting the keenness of Syria under the leadership of President Bashar al-Assad to achieve security and stability in Iraq and Syria's support to the efforts that aim at achieving that."
Mr Allawi said diplomatic ties with Syria would be restored as soon as possible.
Syria and Iraq broke off diplomatic relations in 1980 - largely because of Syria's support for Tehran during the 1980-88 Iran-Iraq war.
Economic relations began to warm in the late 1990s, but formal relations have not yet been re-established.
BBC Arab Affairs Analyst Magdi Abdelhadi says Mr Allawi would have offered Damascus economic incentives to secure better co-operation on the border issue.
The Syrian economy is in deep crisis and would benefit greatly if it were offered the prospect of a slice of the lucrative reconstruction market in Iraq.
Until the mid-1990s the Syrians were at odds with the Iraqi regime and Damascus was a haven for Iraqi opposition groups.
But the Syrians remain deeply worried by the presence of US troops in Iraq, says our correspondent. They fear the US has a wider agenda to redraw the map of the region, and might use Iraq as a springboard.
Meanwhile, in Beirut, talks are expected to focus mostly on economic issues.
Iraq was once Lebanon's most important trade partner, but this changed with the sanctions.
Mr Allawi will likely encourage the Lebanese to look to Iraq again for business opportunities, correspondents say.