Colombian President Juan Manuel Santos and his Venezuelan counterpart, Hugo Chavez, have restored diplomatic relations that were severed last month by Caracas in a dispute over Venezuela's alleged support of leftist rebels in Colombia.

The two leaders made the announcement late Tuesday after talks. They met at a colonial-era estate in Santa Marta, a city on Colombia's Caribbean coast where 19th-century independence hero Simon Bolivar died.

Cross-border tensions have run high for more than a year as Mr. Chavez, who views Bolivar as the inspiration for his socialist movement, imposed what Colombia called a "trade embargo" before cutting ties completely last month.

Mr. Santos took office Saturday. He said the two leaders have taken a huge step forward in restoring confidence.

At the heart of the latest dispute were allegations by former Colombian President Alvaro Uribe that Venezuela had supported rebels from the Revolutionary Armed Forces of Colombia, or FARC. Mr. Chavez, in turn, criticized Mr. Uribe for waging a military campaign against the rebels that threatened the entire region.

The Venezuelan president also complained about a Colombian deal to allow U.S. troops more access to its military bases.

On July 22, Venezuela severed ties with Colombia after Bogota went before the Organization of American States in Washington to present photographs, maps, coordinates and videos it said show 1,500 guerrillas hiding inside Venezuela. Mr. Chavez denied the charge, saying the items did not provide any solid evidence of a guerrilla presence there.

Mr. Santos served as defense minister under Mr. Uribe and has clashed before with Venezuela's president. But the U.S.- and British-educated economist eventually began to distance himself from Mr. Uribe and reached out to Mr. Chavez, emphasizing his interest in mending relations between the two Andean neighbors.