It was all smiles and friendly talk of brotherhood and shared destiny at the presidential palace in Caracas yesterday, as the leaders of Colombia and Venezuela met to reaffirm their commitment to fully restore diplomatic ties and put recent bitter disputes behind them. 

The two neighboring Andean nations began work to restore broken relations shortly after Colombian President Juan Manuel Santos took office in August. 

"We are determined that no one or anything will derail us," said Santos during his second meeting with Venezuelan President Hugo Chavez since August. "We've gone from good-intentioned statements to concrete accords," he added. 

The two leaders signed a series of bilateral agreements aimed at strengthening ties, including deals on energy, tourism, cultural exchanges, economic development, border security and fighting drug trafficking. Among the infrastructure projects they agreed to are plans to build oil and gas pipelines as well as a new bridge straddling their shared border.

The agreements signal the end of several years of tense relations between the two nations, during which mutual accusations and distrust resulted in Venezuela sending troops to the Colombian border, both countries recalling their envoys, and bilateral trade plummeting.

In July, Chavez broke off diplomatic relations after the administration of Colombia's then-President Alvaro Uribe accused Venezuela of harboring rebels from the Revolutionary Armed Forces of Colombia (FARC), a leftist Colombian guerilla group. Chavez has repeatedly denied the accusation. 

Analysts say leaders now appear prepared to let economic interests override ideological differences and mutual distrust. 

The new pragmatic approach adopted by both Chavez and Santos has led to a quick rapprochement within a few months as both leaders look to revive bilateral trade, which totaled around $7 billion in 2008. In the first five months of 2010, Colombian exports to Venezuela had plunged 71 percent, dropping to $652 million. 

Venezuela is Colombia's second-biggest export market, following the United States, while Venezuela relies on Colombia's food exports to feed its population. 

For Colombia's business leaders -- particularly in the food, dairy, automobile and textile industries -- along with communities living along the 1,374-mile Colombian-Venezuelan border, the reactivation of cross-border trade is welcome news. 

The latest meeting also addressed a thorny issue: the $800 million in debt that Venezuela owes Colombian companies. Venezuela committed to paying it down, beginning with an initial payment of $336 million to Colombian exporters.

The easing of diplomatic tensions also stems partly from an August ruling by Colombia's Constitutional Court that declared a controversial U.S.-Colombian defense pact -- giving the U.S. military access to seven army bases in the country -- as invalid because it was not approved by lawmakers. 

For Chavez, who argued that the American military presence posed a serious threat to Venezuela's security, the pact was a key source of tension with Colombia. 

Since the court ruling, the Santos government has refrained from discussing the military agreement and has yet to decide whether to put the deal to the test before the Colombian congress, which suggests that Santos might decide to change its terms or even abandon it altogether. 

The new conciliatory tone between Bogotá and Caracas reflects Santos' pragmatism, as do his efforts to improve similarly tense relations with neighboring Ecuador. But both initiatives also stem from Santos' aim to change perceptions among many Latin American leaders, who often view Colombia at best as beholden to its close alliance with the U.S., and at worst as Washington's pawn. 

In so doing, Santos hopes to integrate Colombia more fully within Latin America, so that the country might play a greater leadership role on regional issues, from tackling drug trafficking to climate change. 

"Everything that Latin America has, is what the world is asking for," said Santos during the Caracas meeting, referring to rising global demand for water, energy and food. 

"And it is in this way that we can integrate ourselves to create a synergy, create processes in which our two countries and the continent as a whole can come out stronger as a result. And above all, this is what is best for our two nations, for the Colombian and Venezuelan people," he added. 

But the issue of the alleged presence of top FARC commanders hiding in Venezuela has still not gone away, and suspicion about Venezuela's sympathy with the rebels still lingers in Colombia, analysts say.

Despite Chavez's recent assertion that he has no links with the FARC rebels and that there are no guerrilla camps based in Venezuela, these concerns are still privately held by many Colombian lawmakers and army leaders. 

They also say that Venezuela is not doing enough to stem the flow of drugs through its territory. In recent years, Venezuela has become an increasingly important drug-smuggling corridor for drug traffickers to transport cocaine from Colombia to the U.S. 

Chavez's recent deal with Russia to build Venezuela's first nuclear power station also raised eyebrows in Bogotá. Former President Uribe, a long-time foe of Chavez, said such nuclear-development plans posed a serious threat to the region's security. 

Still, for the short term at least, it appears that Colombia is prepared to put these lingering suspicions aside to strengthen relations with Venezuela and integrate more fully with Latin America. For Venezuela, restoring bilateral trade means gaining much-needed cheaper food imports from Colombia as Caracas tries to control high inflation and intermittent food shortages. 

For Latin America as a whole -- and in particular for Brazil and the regional body, Union of South American Nations (UNASUR), which have both played an important behind-the-scenes role in patching up relations between Colombia and Venezuela -- the recent rapprochement between the two nations shows that the continent can sort out its own problems and preserve regional stability.