Pakistan and Iran have agreed to “de-escalate” tensions after an exchange of missile and drone attacks this week raised fears of further instability in the region, Islamabad said.

Pakistan’s Foreign Minister Jalil Abbas Jilani and the foreign minister of Iran, Hossein Amir-Abdollahian, spoke via phone on Friday, Pakistan’s foreign ministry said in a statement.  “The two foreign ministers agreed that working level cooperation and close coordination on counter terrorism and other aspects of mutual concern should be strengthened. They also agreed to de-escalate the situation,” the statement read.

“The return of ambassadors of the two countries to their respective capitals was also discussed,” it added.

On Tuesday night, Iran carried out a missile and drone attack against the armed group Jaish al-Adl in Pakistan’s southwestern border province of Balochistan. Pakistan in turn struck armed-group targets inside Iran on Thursday.

Pakistan recalled its ambassador from Tehran and said Iran’s envoy – on a visit home – was blocked from returning to Islamabad.

Al Jazeera’s Osama bin Javid, reporting from Islamabad, said there has been “a lot of diplomacy in the last 24 hours from both sides” to try and come out of the growing tensions.  “For the first time, we’re seeing both countries’ militaries get involved in what has been a slow-burner proxy war that has continued in these two provinces of Balochistan and Sistan-Baluchestan, and now, as we’ve been hearing from various sources and analysts, things seem to be going back on track towards normalcy.”

On Friday, Pakistan’s Caretaker Prime Minister Anwaar-ul-Haq Kakar convened a meeting of the National Security Committee, with all military services chiefs in attendance, to discuss the current crisis.

Kakar had cut short a visit to the World Economic Forum in Davos, Switzerland, and flew home after the attacks on Thursday.

Friday’s national security review concluded that “the two countries would mutually be able to overcome minor irritants through dialogue and diplomacy and pave the way to further deepen their historic relations”, according to a statement from the prime minister’s office.

However, it also resolved that any attempts to breach the territory of Pakistan “will be responded with full might of the state”.  It urged Iran to use existing communication channels to address security concerns.

Kakar also told a cabinet meeting following the security huddle that it was in the “interest of both countries” to return to relations as they stood before Iran’s strikes, another statement said.

Sources told Al Jazeera’s Javid that the cabinet had decided to end a standoff and also endorsed a move to re-establish full diplomatic relations with Iran.

“These areas are problem areas for both Pakistan and Iran, and proxies aligned to both countries have been operating in this region for years now,” Javid explained.  “They have carried out tit-for-tat attacks against each other, but the recent developments are unusual as both countries militaries are involved this time around, using ballistic missiles, drones and heavy ammunition against each other,” our correspondent added.

The tit-for-tat attacks have been the largest cross-border intrusions in recent years and have raised alarm about the potential for wider instability since the war between Israel and Hamas erupted on October 7.

However, both countries have signalled a few times their desire to calm tensions.

On Thursday, Iran’s Ministry of Foreign Affairs said it was committed to good neighbourly relations with Pakistan but called on Islamabad to prevent the establishment of “terrorist bases” on its soil.

Pakistan issued a similar statement with its Ministry of Foreign Affairs saying that its “sole” reason for the retaliatory attacks was “in pursuit of Pakistan’s own security and national interest, which is paramount and cannot be compromised”.

United Nations Secretary-General Antonio Guterres urged the two countries to “exercise maximum restraint to avoid a further escalation of tensions”.

Guterres “underlines that all security concerns between the two countries must be addressed by peaceful means through dialogue and cooperation in accordance with the principles of sovereignty, territorial integrity and good neighbourly relations,” UN spokesperson Stephane Dujarric said.

(Aljazeera)