Tamil Tiger rebels and the Sri Lankan army have agreed to uphold a two-year-old ceasefire.
The Tigers overran Col Karuna's forces easily
It was the first meeting between the two since a split in the rebel movement earlier this year, and signals a return to normality.
The meeting coincided with the news that a senior Tamil Tiger rebel was killed by the leader of the breakaway faction, Colonel Karuna.
The administration led by Colonel Karuna collapsed earlier this week after brief fighting.
Peace on track
Ramesh, the newly installed Tamil Tiger leader in the east, called for the meeting with the Sri Lankan army.
He assumed control of the region following the mass disbanding of Colonel Karuna's forces on Monday and his subsequent disappearance.
Norwegian-led peace monitors had travelled to the east to facilitate the talks.
Major General Trond Furuhovde, who led the monitors, described the meeting as positive.
The two sides issued a statement after the meeting saying they had restored relations and agreed to uphold the two-year-old ceasefire.
"The parties agreed to restore relations and to meet on a regular basis," Preben
Rasmussen, peace monitor in the east, said.
The peace monitors say they hope to restart their patrols around Batticaloa into Colonel Karuna's former stronghold following these discussions.
So far patrols have only restarted in the north of the region.
Top rebel killed
Meanwhile the Tamil Tigers say one of their most senior intelligence officers has been killed by Colonel Karuna.
They say the man, Neelan Sinnathamby, was shot shortly before Colonel Karuna called off his rebellion on Monday and fled.
No sign yet of Col Karuna
A pro-rebel website is also reporting the Tamil Tigers as having returned all child soldiers in the east back to their parents.
Two-hundred-and-sixty-nine young fighters were recently released, nearly 150 of whom were under 18.
In Batticaloa town, Jaffna Tamil businessmen originally from the north who were expelled by Colonel Karuna a fortnight ago are slowly returning and reopening their shops.
Norwegian-led peace monitors have resumed work observing the ceasefire in the east.
Now that the situation there appears to be resolved, President Chandrika Kumaratunga has the difficult task of fulfilling her election pledge to restart the stalled peace negotiations with the Tamil Tigers, says the BBC's Anna Horsbrugh-Porter in Colombo.