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Prime Minister Francisco Fadul of Guinea Bissau said he and President Diouf had agreed to an "immediate resumption of cooperation", and put an end to frosty relations between the two countries, Lusa reported on Friday.
Fadul, in a two-day peacemaking visit to Senegal that started on Thursday, said a "more formal" resumption of bilateral ties would take place in August at a meeting of the countries' joint commission on cooperation.
Diouf has also agreed to send his planning minister to Geneva for the May 4-5 international conference on aid to Guinea Bissau, so both countries could present a "united bloc", Lusa said.
Fadul told reporters shortly after his arrival that relations between the two countries had been "definitely re-established". He apologised formally to the government of Senegal for the involvement of some Guinea Bissau nationals in arms trafficking to MFDC guerrillas in Casamance.
Relations hit an all-time low when Guinea Bissau's self-styled "Military Junta", led by the sacked Armed Forces Chief of Staff General Ansumane Mane, tried to drive Guinean Bissau President Joao Bernardo Vieira from power. Vieira appealed for, and received, Senegalese and Guinean military help to put down the eight-month rebellion which ended with a peace accord last November.
Fadul, backed by the army rebels, assumed office on 20 February to lead an interim government until general elections later this year.
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