For Israel, the decision to appoint a new ambassador to Jordan represents a rare example of full diplomatic relations with an Arab neighbour.
For Jordan’s King Abdullah, the deal is yet another step on a precarious path of balancing acts that his seen his country survive for nearly a century without resources or military might.
The Israeli embassy in Amman was shut down last year, after a violent altercation in which an Israeli security guard shot dead two Jordanian citizens.
Israel is reported to have “expressed regret” for that incident, and for the death of a Jordanian magistrate in 2014 during an argument at the border crossing with an Israeli officer.
It will pay compensation to the victims’ families via the Jordanian government to the tune of $5 million (£3.5 million), local media reported.
But the agreement, achieved with the help of US diplomats, does not entirely end the tension between two countries.
King Abdullah is concerned that the breakdown in the diplomatic process between Israel and the Palestinians, following last month's recognition by US President Donald Trump of Jerusalem as Israel's capital, could cause tension within Jordan as well.
During his meeting Vice President Mike Pence on Sunday he voiced “concerns regarding the US decision on Jerusalem that does not come as a result of a comprehensive settlement to the Palestinian Israeli conflict”.
Mr Pence tried to reassure him that the US “is committed to restarting the peace process, and Jordan does now and has always played a central role in facilitating peace in the region”, but on the Jerusalem issue he said they agreed to disagree.
Jordan has largely succeeded in surviving the turmoil of the last seven years unscathed. Pro-democracy protests took place, but did not threaten the regime. Hundreds of thousands of Syrian refugees arrived, but were largely isolated in camps. ISIS tried to make inroads and garnered some support in some towns, but failed to establish a permanent base.
However, the Palestinian issue could have deeper implications. At least half of Jordanian citizens are of Palestinian origin and over a million stateless Palestinian refugees still live there.
While the old “Jordan is Palestine” slogan has not been heard in mainstream Israeli right-wing circles for many years, the suspicion that Israel may push its own Palestinians across the Jordan river to establish their state there, at the Hashemites' expense, can never fully disappear.