Turkey and Greece have agreed to talks over disputed waters in the eastern Mediterranean, both sides said on Tuesday, after diplomatic efforts led by Germany to defuse a crisis that has raised fears of conflict.

A standoff over gas exploration in contested waters has seen the NATO neighbours stage rival war games amid aggressive rhetoric, but recent days have seen softer tones, raising hopes for a diplomatic solution.

The latest flare-up began in August when Turkey sent the Oruc Reis research vessel to disputed waters near a Greek island accompanied by warships and prolonged the mission three times despite repeated calls from the European Union and Greece to stop.

But on Tuesday, both sides said they were "ready to start exploratory talks” as a three-way videoconference between Turkish President Recep Tayyip Erdogan, German Chancellor Angela Merkel and European Council chief Charles Michel took place Tuesday, the Turkish presidency said.

The Greek foreign ministry confirmed, saying these would take place in Istanbul "soon” without providing any precise date.

Oruc Reis going back? 

This is not the first time that Greece and Turkey have held such talks on continental shelf disputes — the last were held in 2016.

Ankara argues that it has the largest coastline of all the eastern Mediterranean nations but a disproportionately small share of the sea because of Greece’s far-flung islands — some of them within sight of Turkey’s shore.

Athens counters that its claims to the waters are grounded in international law and past agreements signed by Ankara.

Turkish officials have insisted the Oruc Reis research vessel will return to its work, and Turkish media on Tuesday reported the ship had left Antalya Port.

Ship-tracking website marinetraffic.com showed the vessel was off the coast of Turkey near Antalya on Tuesday late afternoon.

Turkey has also extended the operations of another research vessel, Barbaros Hayrettin Pasa, in disputed waters off Cyprus until October 18. Its drill ship Yavuz will also remain off Cyprus until October 12.

During the videoconference, Erdogan suggested a regional conference with all sides including Turkish Cypriots would be "positive and constructive” in addressing the eastern Mediterranean issue.

Turkey was facing possible sanctions at a European Council summit Thursday and Friday, but after a security guard working for Michel tested positive for coronavirus, it was postponed to October 1 and 2.

The issue has also strained relations between Turkey and France, with barbs traded between Erdogan and French President Emmanuel Macron, whose country sent fighter jets and vessels in support of Greece.

Greece and France have demanded tough sanctions against Ankara.

The Elysee Palace said Macron would hold telephone talks with Erdogan Tuesday for the first time since tensions flared over Turkey’s actions.

A French presidential official said Macron would reaffirm Paris’ support for Greece.

Erdogan called for "sincere dialogue” to settle the row and rejected "any imposition, harassment, or attack in the opposite direction”, in an address to the United Nations General Assembly via videoconference.

Turkey "cannot turn a blind eye” to the violation of its rights in the eastern Mediterranean, he said