The Kurdistan Regional Government and Baghdad are closer to resolving a dispute that at its lowest point triggered armed clashes.
The two sides have reached an initial agreement to lift an international flight ban imposed on the autonomous Kurdish region by the Iraqi central government after Erbil held an independence referendum in September last year against Baghdad's will.
Delegates agreed late on Monday that Erbil and Sulaimaniyah's international airports will be allowed to resume flight operations if they follow regulations set by the Iraqi civil aviation authority (ICAA).
Under the agreement, permanent representatives from the ICAA's safety and transport department will be stationed at the airports.
Monthly meetings will also be held between the ICAA and the directors of the airports to facilitate communications between the sides and to "prevent the conflict from escalating further".
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Iraq's cabinet issued a statement announcing that "an atmosphere of trust" has been reached in talks with the KRG.
It comes after Baghdad sent troops to recapture disputed areas held by Kurdish forces in the wake of the independence referendum in which Kurds overwhelmingly voted to secede from the rest of Iraq.
Iraqi delegates to the talks said five separate meetings were held to discuss issues including land borders, airports, the oil industry, customs revenue and dams.
"The meetings formulated a number of recommendations to help resolve the issues," the cabinet said.
It must have the Iraqi prime minister's approval before it can be implemented.
Mahdi Al Alaq, secretary general of the Iraqi council of ministers and head of the Iraqi delegation to the talks with Erbil, said Mr Al Abadi "wants to study the initial agreement in a constructive way that is based on the principles of the Iraqi constitution and the federal laws".
Falah Mustafa, the KRG's minister of foreign relations told The National that Erbil views the recent developments as a "positive step forward".
Mr Falah urged the central government in Baghdad to "seriously consider the suggested solutions" to other areas of contention that were put forward at the talks.
The two sides have quarrelled over land and oil revenue sharing since the fall of former Iraqi president Saddam Hussein in 2003.
Iraqi president Fuad Masum also welcomed the initial agreement.
"Dialogue should be the only means to end the crisis between Baghdad and Erbil," he said.
Jon Wilks, Britain's ambassador to Iraq, said "the scene is now set for Baghdad and Erbil to peacefully resolve disputes".
Meanwhile, US secretary of state Rex Tillerson on Tuesday stated Washington's support for continuous talks during a telephone call with the Kurdish prime minister, Nechirvan Barzani.
Mr Tillerson stressed the importance of using the Iraqi constitution as a framework through which the KRG and Baghdad can resolve their differences.