Eritrea is sending a rare delegation to neighbouring Ethiopia for peace talks, diplomats said, days after Ethiopia's new prime minister took a major step towards calming deadly tensions with its decades-long rival.

This is the first such delegation Eritrea has sent since 1998, when a border war erupted between the countries.

Eritrea's long-time President Isaias Afwerki announced the news during a Martyrs Day celebration in the capital, Asmara, ambassadors said on social media.

The ambassador to Kenya, Byene Russom, called it a "new chapter of peace and reconciliation between the Eritrean and Ethiopian people".

Ethiopia's state-affiliated Fana Broadcasting Corporate also reported Mr Afwerki's comments.

Ethiopia earlier this month announced it would fully accept the terms of a peace agreement with Eritrea signed in 2000 to end a two-year border war that killed tens of thousands.

The countries have skirmished a number of times since then. Ethiopia had refused to accept the deal's handing of key locations, including Badme, to Eritrea and continues to control that town.

The decision to accept the peace deal was the biggest and most surprising reform yet announced by Ethiopia's young new prime minister Abiy Ahmed.

"The suffering on both sides is unspeakable because the peace process is deadlocked. This must change for the sake of our common good," Mr Abiy's chief of staff, Fitsum Arega, said at the time.

Ethiopia has said its decision is aimed at ending the stalemate and rejuvenating ties between the two countries. Eritrea shortly after the announcement replied that it had always accepted the peace deal.

On Wednesday Eritrea's ambassador to Japan, Estifanos Afeworki, said on Twitter that the delegation being sent to Ethiopia will pursue "constructive engagement".

Tiny Eritrea is one of the world's most closed-off nations, ruled by Mr Afwerki since gaining independence from Ethiopia in 1993 after years of rebel warfare.

Eritrea has become a major source of migrants fleeing to Europe, Israel and African nations in recent years as human rights groups criticise its harsh military conscription laws.