Eritrean President Isaias Afwerki says Eritrea and Ethiopia have built trust since signing a peace deal in July, but need to iron out further elements of their ties to make their cooperation sustainable.

The neighbours had been bitter enemies ever since a two-year border war, in which some 80,000 people were killed, broke out in 1998 following disagreements over trade.

Ethiopia's prime minister, Abiy Ahmed, extended an olive branch in April, shortly after his appointment, as part of a package of reforms that have reshaped the political landscape in the Horn of Africa.

Since then, the countries have reopened crossing points and embassies and resumed flights between their capitals.

Isaias told state-run television that the peace deal had heralded a "transitional stage that will lead to a new era" between the neighbours.

"The priority now is to create an environment for this new reality to flourish," he told Eri-TV late on Saturday.

"We need to consolidate. One by one, we have to clearly state our issues and solidify them on a concrete basis. The reality is new, but it has to be sustainable," Isaias added, without going into specifics.

"The agenda of pitting Eritrea against Ethiopia as antagonists, an agenda that also sought to isolate Eritrea globally, has concluded. It never succeeded."

(With inputs from agencies.)