Eritrean President Isaias
Afwerki has arrived in Ethiopia for a three-day working visit.
His delegation includes Foreign Minister Osman Saleh and presidential adviser Yemane Ghebreab.
President Isaias and his host, Prime Minister Abiy Ahmed, will hold consultations on further
enhancement of bilateral ties as well as the consolidation of regional
cooperation, according to Eritrea's minister of information.
The Ethiopian Broadcasting Corporation has tweeted a photo of President Isaias's arrival:
Ethiopians and Eritreans hug and kiss as two key crossing points reopen after more than 20 years.
Eritrea has been 'demonised'
Eritrea's Information Minister Yemane Gebre Meskel has said that he was surprised by the speed at which relations with Ethiopia have improved.
He told the BBC's Emmanuel Igunza that he was not expecting the level of goodwill that has been witnessed.
Just a few weeks ago the idea that the leaders of the two countries would meet face-to-face was unthinkable. But following the declaration by Ethiopia's Prime Minister Abiy Ahmed and Eritrea's President Isaias Afwerki that the "state of war" is over things have changed rapidly.
Some activists are now asking whether the situation within Eritrea will change.
President Isaias has been in power since independence in 1993 and has never been elected.
His government has been accused of a raft of human rights violations. Amnesty International says freedom of expression is restricted and "arbitrary detention without charge or trial continue to be the norm for thousands of prisoners of conscience".
But Mr Yemane dismissed these accusations.
"Yes, Eritrea may have... shortcomings here and there," he admitted, "but to portray Eritrea as the worst violator has no basis in fact".
He said that the "so-called human rights agenda" has been pedalled for political purposes and that Eritrea has been stigmatised and demonised.
Of particular concern to rights groups is the indefinite national service. But Mr Yemane said this was a misnomer as it was never intended to be indefinite.
He said the 1994 national service law was about reducing the size of the standing army but the state of tension with Ethiopia meant that people had to serve longer than planned.