The presidents of Colombia and Ecuador have agreed to resolve a diplomatic crisis sparked by Colombia's raid on a Farc rebel camp in Ecuadorian territory which killed a senior commander of the group.

The agreement was reached on Friday at a summit of Latin American leaders in the Dominican Republic that has been dominated by the incident.

Alvaro Uribe and Rafael Correa shook hands just hours after exchanging harsh words over the raid, which had threatened regional stability.

Both leaders also shook hands with Hugo Chavez, the Venezuelan president, who has heavily criticized Colombia for the raid.

"And with this ... incident that has caused so much damage would be resolved," Correa said before standing up and shaking hands with Uribe.

Trade to resume

Chavez later announced that Venezuela would re-open its Colombia border to trade, agencies said.

Separately, Daniel Ortega, Nicaragua's president, said that his country would re-establish diplomatic ties with Colombia, a day after breaking them off.

The developments came on the same day that Bogota announced that a second senior commander of Farc (Revolutionary Armed Forces of Colombia) had been killed in western Colombia by his own men.

The Dominican Republic summit was organized by the Rio Group, comprising 20 Latin American democracies, created in 1986 in part to find solutions to regional problems.

Fiery rhetoric

The diplomatic spat began last weekend when Colombian forces crossed into Ecuadorian territory and killed Raul Reyes, a senior Farc commander, and several other fighters.

Venezuela and Ecuador broke off diplomatic relations with Colombia and sent troops to their Colombian borders.

Uribe had accused Chavez, who had helped broker several hostage releases by Farc prior to the raid, of aiding the rebels.

At one point, Uribe had said he would bring charges against Chavez at the International Criminal Court.

At Friday's meeting, Uribe and Correa traded insults, with Uribe saying Correa had not co-operated in "the fight against terrorism".

Uribe alleged that Colombian forces had found a letter in the Ecuador raid which mentioned "aid delivered to Rafael Correa, as instructed".

Correa responded by calling Uribe a liar, saying "your insolence is doing more damage to the Ecuadorian people than your murderous bombs.

"Stop trying to justify the unjustifiable."

Tense morning

Al Jazeera's correspondent Lucia Newman said the handshakes followed a tense morning of insults and accusations which eased as other Latin American leaders called for calm and reflection and warned that the stability of the region was at stake.

However, the real problem has not been resolved, she said: Colombia shares a border with five other countries and as long as rebels and paramilitary groups continue to seek refuge in neighboring countries, there will still be problems.

While Ecuador has accepted apology for the raid, Colombia has not committed to never carrying out such an act. Therefore it remains a fragile peace, Newman said.

The diplomatic drama unfolded as Juan Manuel Santos, the Colombian defense minister, identified the second slain Farc commander as Ivan Rios.

'Major blow'

Rios was reportedly shot dead by his own chief of security, who offered his severed hand as proof to the Colombian authorities, Santos said in Bogota on Friday.

"Farc has suffered a new, major blow," he said.

Rios was believed to be the youngest member of Farc's secretariat and considered one of the closest aides to Manuel Marulanda, the group's founder.

Initial reports said Rios had been killed in a Colombian military raid.

The motive for the killing is unclear, although the Reuters news agency reported that Colombia has increased the rewards it pays to those who help capture or kill rebel fighters.

In a related development, Farc has provided "proof of life" of 10 more hostages in the run-up to a possible new release.

However, Ingrid Betancourt, the French-Colombian politician, is not one of them, Ramon Rodriguez, the Venezuelan interior minister, said on Friday.

The hostages are thought to be Colombian soldiers.

PHOTO CAPTION

Ecuadorian President Rafael Correa speaks to the media after Colombia, Ecuador and Venezuela agreed to resolve the crisis.

Al-Jazeera