BBC reporter Peter Biles
It broke away in 1991 and wants to be a separate country – but it has not been internationally recognised.
Mogadishu wants the northern territory to be part of a single Somali state.
Since declaring independence, Somaliland has enjoyed relative peace in contrast to the rest of Somalia, which has been plagued by conflict.
Timing of talks
The BBC’s Peter Biles, who was at the talks near London, says that although they were preparatory, they were nonetheless something of a breakthrough.
It was the first time in 21 years that there had been formal, direct contact between the authorities in Mogadishu, and the Somaliland administration, which used to be a British colony, whereas southern Somalia was governed by Italy.
The two sides agreed the talks should continue and, in a declaration, they called on their respective presidents to meet as soon as possible – this could be as early as next week in Dubai.
They also called on the international community to help provide experts on legal, economic and security matters, which our correspondent says are all issues that will need to be addressed in clarifying the future relationship between Somalia and Somaliland.
Significantly, they’ve also agreed to co-operate in the fight against terrorism and piracy.
However, our correspondent says the Transitional Federal Government of Somalia and the Somaliland administration are still poles apart on the central issue of Somaliland’s status.
Britain, Norway and the European Union have said they want the two sides to negotiate a settlement.
Somaliland agreed to enter into the talks during a February meeting in London, when 40 global leaders met to tackle piracy, terrorism and political instability in Somalia.
But its administration says its priority is to remain separate from the rest of Somalia – and wants Mogadishu to recognise its independence.
Analysts have questioned the timing of the talks – the mandate of Somalia’s transitional government expires in August when it is due to hand over to an elected president.
Somaliland unilaterally declared independence after the overthrow of Siad Barre – who led Somalia’s last functioning national government.
It is relatively stable and holds regular elections, which have seen peaceful transfers of power – unlike the rest of the country, which has been racked by continued conflict ever since.
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