Somalia's president visited Ethiopia on Saturday, his office said, the strongest sign yet of improving relations between the two neighbours after a year of tensions over Addis Ababa's plans to build a naval base in a breakaway Somali region.

The two countries are looking to build on a recent peace deal that aims to defuse mounting tension in the Horn of Africa.

The rift began when Ethiopia signed a controversial agreement with Somaliland, Somalia’s breakaway region, reportedly offering to recognise its independence in exchange for a Red Sea port and a milita

They have yet to work out the fate of the MoU Ethiopia had signed with Somaliland, leading to a freeze in relations.

Ethiopia and Somalia agreed to work together on a multinational force battling Islamist insurgents, signaling a further reduction of diplomatic tensions between the neighboring countries.

Somalia and Ethiopia are set to restore full diplomatic relations after a visit by Somalia's President Hassan Sheikh Mohamud to Addis Ababa, as efforts intensify to heal a year-long rift that threatened further instability in the Horn of Africa.