An Ivory Coast delegation arrived in Mali on Thursday for talks on a five-month-old row sparked by the detention of 46 Ivorian soldiers, Malian officials said.
The West African bloc ECOWAS has given Mali until year's end to release the troops, whom the ruling junta has branded "mercenaries".
The dispute erupted on July 10, when 49 Ivorian soldiers were arrested upon arrival at Mali's airport. Three were later released.
"This is an issue that is being resolved, and we can say that we have just made a fruitful trip here on Malian soil," said Tene Birahima Ouattara, head of the official Ivorian delegation.
"There was a misunderstanding between the Republic of Mali and the Republic of Cote d'Ivoire a few months ago, it was good that we could meet to discuss it. This is what we did," he added.
Ivory Coast and the UN said the troops were flown in to provide routine backup security for the German contingent of the UN peacekeeping mission in Mali.
But Bamako accused them of being "mercenaries" and in August charged them with seeking to undermine state security.
As the spat escalated, Ivory Coast last month said it would withdraw its troops from the UN mission, MINUSMA.
On December 4, a summit of the Economic Community of West African States (ECOWAS) set New Year's Day as a deadline for their release, failing which the bloc would impose new sanctions against Mali.
Relations between ECOWAS and Mali have been strained since elected president Ibrahim Boubar Keita was toppled in August 2020 by officers angered at failures to roll back a jihadist insurgency.
"We were able to note the willingness of both sides to work to overcome this event by preserving the ties that exist between our two countries," said Mali's Foreign Minister Abdoulaye Diop.
"Our discussions have led to the signing of a memorandum of understanding to promote peace and work to strengthen friendly relations between the two countries," he added.
The Ivorian delegation will meet junta leader Colonel Assimi Goita and hold a working meeting with government members, an aide to Goita said.
"As a gesture of goodwill by Mali, the Ivorian delegation is also scheduled to meet the detained soldiers," the source added.
Togolese Foreign Minister Robert Dussey, whose country is mediating in the dispute, was also expected in Bamako on Thursday.
"He is going to reconcile the different points of view to get a swift solution to the problem," a diplomat in Bamako said.