Ethiopia and Egypt cooled talk of war on Tuesday and agreed to more dialogue to resolve a row over a giant dam that the Horn of Africa nation is building on the Nile, on which Egyptians depend on for almost all their water.
Africa's second and third most populous nations have traded barbs in past weeks about Ethiopia's new hydroelectric project, which Egypt fears will reduce a water supply vital for its 84 million people, who mostly live in the Nile valley and delta.
Egyptian President Mohamed Mursi said on June 10 he did not want war, but would keep "all options open", prompting Ethiopia to say it was ready to defend its $4.7 billion Great Renaissance Dam, which lies near the border with Sudan.
Ethiopia summoned the Egyptian ambassador this month after politicians in Cairo were shown on television suggesting they supported Ethiopian rebels and military action.
An Ethiopian diplomat said another round of talks would be held between ministers and experts in a few weeks.
Egypt, whose population uses almost all of the Nile water available to it, cites a 1929 pact which entitled Cairo to 55.5 billion cubic meters a year of the Nile's flow of around 84 billion cubic meters.
Ethiopia and five other upstream Nile states, such as Kenya and Uganda, say those claims are outdated and have signed a deal effectively stripping Cairo of its veto based on colonial-era treaties over dam projects on the river.
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