Libyan leader Moammar Gadhafi and Chadian President Hissene Habre, bitter enemies in a long desert conflict, restored diplomatic relations between their nations Monday and agreed to solve their differences peacefully.

A statement issued in both countries and in Lome, Togo, said Chad and Libya would "scrupulously respect the Sept. 11, 1987 cease-fire" that ended the fighting in northern Chad.The agreement, mediated by Togolese President Gnassingbe Eyadema, comes at a time when the mercurial Gadhafi appears to be showing signs of some moderation, at least with regard to his neighbors in North Africa.

It also comes a year after Habre's forces, in a series of lightning battles, succeeded in driving he Libyans out of northern Chad after years of occupation in support of Chadian rebels.

The statement did not mention the Aouzou Strip, a 44,000-square-mile band of territory across the northern border of Chad that was seized by Libya in 1973. The Aouzou is he subject of a dispute going back to pre-World War II days before either Chad or Libya became independent.

In an interview with The Associated Press last month, Gadhafi said he was willing to negotiate the status of the Aouzou.

"We can negotiate," he said. "It is a problem of borders.