The presidents of Yugoslavia and Macedonia are launching a joint struggle against ethnic Albanian militants. The two leaders promise defence co-operation and co-ordinated security efforts along their borders.
They say they will work together to crush militants operating in Macedonia and Serbia, Yugoslavia's larger republic.
"We hope for international solidarity, because terrorism has the same appearance all over the world," Yugoslav President Vojislav Kostunica said after agreeing the deal with Macedonian President Boris Trajkovski.
Neither leader offered specifics on the plans.
Macedonia, a former Yugoslav republic, and Yugoslavia have long hinted they would increase their cooperation to fight militants.
But the latest talks indicate Macedonia's desire to quell renewed disturbances in the northern part of the country.
Yugoslav and Macedonian authorities claim that ethnic Albanian militants are nothing more than terrorist groups. The ethnic Albanian rebels say they are fighting for greater rights.
The insurgency has eased in recent months, but incidents have flared in the northwest. In southern Serbia, fighting ended earlier this year under a NATO-brokered agreement that led to the disarmament of rebels there.
Under an August accord engineered by the United States and the European Union, ethnic Albanian rebels in Macedonia agreed to stop fighting and handed in more than 4,000 weapons to NATO in exchange for constitutional amendments granting greater rights to their large minority.