Pakistan on Tuesday signed a deal with the United States governing arrangements for NATO convoys travelling to Afghanistan, seeking to draw a line under a seven-month border blockade.
Islamabad agreed to reopen land routes for NATO goods on July 3 after ordering the longest border closure of the 10-year war in neighbouring Afghanistan in protest at botched US air raids that killed 24 Pakistani troops.
The agreement is part of efforts by the "war on terror" allies to patch up their fractious relationship, which plunged into crisis last year over the US raid that killed Osama bin Laden hiding in Pakistan and the air strikes.
It comes just one day before the head of Pakistani intelligence, Lieutenant General Zaheer ul-Islam, begins a three-day visit to Washington for talks with the head of the CIA, which has been interpreted as another sign of a gradual rapprochement.
Under the agreement inked in Rawalpindi, the home of Pakistan's powerful military, the United States will release $1.1 billion under the Coalition Support Fund to reimburse the troubled nation for fighting militants within its borders.
Officials at the ceremony gave no details of the Memorandum of Understanding or MoU, nor did they release a copy at a news conference.
Guidelines laid out by the Pakistani parliament earlier this year insisted that in future no weapons and ammunition be transported through the country, though Western officials say this never happened in the first place.
A Pakistani security official said the agreement gave Islamabad the right to refuse or reject any shipment and special radio chips would be fitted to containers for monitoring.
Richard Hoagland, the deputy US ambassador to Islamabad who signed the agreement on behalf of Washington, hailed it as a "demonstration of increased transparency and openness" between the two governments.
The Pakistan government relented in its blockade after US Secretary of State Hillary Clinton said sorry for the air raid deaths, but few supply trucks have made it across the border in the weeks since then.
Officials closed the Torkham border crossing, the quickest route to Kabul from the port city of Karachi, to NATO traffic on Thursday over security fears.
The Pakistani Taliban have vowed to attack NATO supplies and last Tuesday, one of the truck drivers was shot dead in the northwestern town of Jamrud.
Pakistani Defence Secretary Asif Yasin Malik, who attended the ceremony, said the deal would contribute to the stability of the region and hailed it as a "landmark event".