Deputy Premiers Matteo Salvini and Luigi Di Maio sealed a truce during around two hours of talks late on Monday with Premier Giuseppe Conte.
The truce comes after a period of tension between the two partners in the coalition government, Salvini's League and Di Maio's 5-Star Movement (M5S), in the run-up to last month's European elections.
Tension remains, however, between the deputy premiers and Conte over how to avert the danger of the European Commission opening a infringement procedure against Italy for failing to comply with the debt rule.
Conte has warned against taking on the Commission over management of the public finances but Di Maio and Salvini are less inclined to bow to pressure from Brussels, sources say.
Interior Minister Salvini and Labour and Industry Minister Di Maio both said Monday's meeting was "positive".
Salvini ruled out the government passing an additional budget to correct the public finances while Di Maio said tax cuts are a priority. The League leader was said that he "never had any doubts" about whether the government would continue although he added that some ministers had slowed the executive down.
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