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Sudan and South Sudan have signed an agreement on border crossings in a bid to reduce tension following the South's independence in July.
The two sides have agreed to open 10 border crossings to ease travel.
Last week, South Sudan accused the north of damaging its economy through a cargo embargo, in place since May.
For its part, Sudan accuses the South of fuelling conflict in the border regions of South Kordofan and Blue Nile, an allegation Juba denies.
The agreement was signed in Khartoum and brokered by African Union mediator and former South African President Thabo Mbeki.
Teams with six soldiers from each side and six Ethiopian peacekeepers would investigate any reports of violations, the Sudanese news agency reports.
In July, the UN Security Council sanctioned the deployment of 300 Ethiopian troops to monitor a demilitarised buffer zone between the two countries.
The BBC's James Copnall in Khartoum says the real significance of the deal is perhaps that it shows Sudan and South Sudan want to show they can work together.
This comes despite both sides accusing the other of supporting rebel movements, and a failure to reach an agreement on the crucial area of oil, he says.
Despite the deal, the two sides have not yet demarcated their border - especially in Abyei, which is claimed by both sides.
'Backing rebels'
"Today we agreed to open 10 border crossings, to facilitate the movement of people and communication between the people of the two countries," Sudan's Defence Minister Abdelrahim Mohammed Hussein said, after signing the accord with his counterpart, John Kong, the AFP news agency reports.
Gen Hussein denied the conflict in Blue Nile and South Kordofan - which had displaced tens of thousands of people - had caused tension between the two countries.
"There are no allegations against the government of South Sudan and there are no differences between us on Blue Nile and South Kordofan," he said, AFP reports.
Earlier this month, Sudan said it was complaining to the UN Security Council that South Sudan had sent 25 armed land-cruisers to support rebels in Blue Nile.
Sudan had previously made a similar complaint about South Kordofan, where rebels have been fighting pro-Khartoum forces for the last three months.
South Sudan strongly denies the allegations.
During the long north-south civil war, many residents of the two areas fought for the SPLM , which is now the ruling party in the south.
Last week, Sudan ordered 17 political parties, including the SPLM-North, from operating, saying their leaders were now foreigners.
South Sudan has also accused the north of declaring an "economic war" by unilaterally introducing a new currency and imposing a cargo embargo in May.
Khartoum said it was acting to protect its own economy ahead of the split.
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