Indonesia and Malaysia have agreed to hold talks about an offshore oil field claimed by both countries.
Tension has been mounting between the neighboring nations, with Indonesia sending fighter jets and warships to the disputed area off the east coast of Borneo.
They were deployed before Indonesian President Susilo Bambang Yudhoyono's visit to a nearby area on Monday. Malaysia accused Indonesia of encroaching on its territory.
But both countries say they want to resolve the matter peacefully. Indonesian Foreign Ministry Spokesman Marty Natalegawa says Malaysian Prime Minister Abdullah Ahmad Badawi and Indonesia's President Susilo Bambang Yudhoyono talked by telephone and agreed to discuss their conflicting claims to the oil field in the Sulawesi Sea.
"Between the two governments there is a good communication now established at various levels including, I am told, reportedly talks between the prime minister of Malaysia and the President of Indonesia," said Marty Natalegawa. "[It] is certainly Indonesia's intention and Indonesia's position to want to establish diplomatic communication to address this issue."
Mr. Natalegawa says no date has been set for the talks between the two leaders, but he adds that the foreign ministers of both countries will discuss the issue when they meet on the sidelines of a regional meeting Wednesday in Jakarta on Wednesday.
The long-running dispute centers around lucrative oil blocks off Borneo island, which comprises the sultanate of Brunei, Malaysia's Sabah state, and Indonesia's Kalimantan region.
The oil blocks lie near Sipadan and Ligitan islands. The International Court of Justice handed sovereignty of the islands to Malaysia in 2002, but Indonesia claims Malaysia's territorial waters extend only 19 kilometers from the islands.
Mr. Natalegawa stresses that Indonesia's readiness to hold talks does not mean it has given up its territorial claim.
"Our readiness to open diplomatic communication should not in any way be construed as being a lessening, a weakening of our resolve in making this statement, in confirming that the two territory concerns is actually part of Indonesian territory," he said.
As if to drive that message home, Mr. Yudhoyono travelled close to the disputed area on Monday to visit oil installations and holding centers for Indonesian migrant workers. The workers fled Malaysia last week after a government amnesty for illegal workers ran out, further exacerbating tensions between the two countries.
Malaysia says it has also stationed two warships in the disputed area to monitor Indonesia's movements.