Egypt's prime minister said Ethiopia's planned Nile River dams "could be a source of benefit" – a significant change in tone by Egypt's new rulers on the highly contentious issue.
Essam Sharaf's remarks came after talks in Cairo with Ethiopian Prime Minister Meles Zenawi on Saturday. It's the first visit by an Ethiopian official since Hosni Mubarak was ousted by a popular uprising in February.
Zenawi said his country is "opening a new chapter" with Egypt.
Under Mubarak, Egypt objected to the Ethiopian dams, saying they will threaten Egypt's water rights.
Egypt previously refused any deal that would reduce its share of the Nile and give more access to other Nile basin countries.
A 1929 colonial-era treaty gives Egypt majority rights to the Nile's waters.