For the past seven years, Ethiopia and Egypt have fought over the construction of a dam on the Blue Nile. The Ethiopians say the project will boost its economy, but the Egyptians claim it will cut off their water supply.

Ethiopia, which is financing the project alone and hopes to become the continent's biggest power generator and exporter, dismisses the claims.

Sudan supports the dam because it will regulate floods and provide electricity and irrigation.

Talks between the three governments have stalled for months but they have now decided to draw up a report of solutions to the issue and agreed to hold heads of state meetings annually.

Egypt, Sudan and Ethiopia have agreed to finish the initial technical study within one month.