On July 9, 1998, Barry R. McCaffrey, then the White House drug policy director, fired an opening salvo against the Dutch, declaring that drug-fighting policies in the Netherlands were "an unmitigated disaster."

Eleven days later, after a maelstrom of criticism in the Netherlands, McCaffrey acknowledged he may have overstepped. On reflection, he said, the policy was a "mitigated disaster."

But the flood gates had opened, and the Bush administration has been waging a public battle with Dutch authorities over their permissive approach to drugs, criticizing cannabis cafes that target foreigners and ecstasy factories supplying drugs to Americans.

In 2000, the U.S. Drug Enforcement Administration called the Netherlands "perhaps the most important drug trafficking and transiting area in Europe," and last year McCaffrey's successor, John P. Walters, called the country's policies "fundamentally irrational."

But last Thursday there was a limited rapprochement. Standing together at the National Press Club, Walters and Hans Hoogervorst, the Netherlands' health secretary, announced they had signed an agreement for reducing drug use. In an instant, seven years of acrimony was history amid handshakes, smiles and warm words.

"What an entertaining pairing," said Peter Reuter, a drug policy expert at the University of Maryland, who said he was surprised by the move. Although there has been closer cooperation since 2003 with a bilateral program known as "Agreed Steps," President Bush said in his most recent annual report to Congress that the Netherlands remained a "dominant source country" for "club drugs."

The reason for the sudden love-in? The administration drug chief and his new best friend had bonded over a new high-potency form of marijuana, known as THC, because of its psychoactive ingredient delta-9-tetrahydrocannabinol.

"The conventional, or cartoon, view of our two countries is that the United States is irresponsibly harsh and the Dutch are irresponsibly permissive and we are anti-poles of how you handle drugs," Walters said Friday.

"But on a visit to Holland earlier this year, I was struck by how much commonality there was over the issue of marijuana THC and high-potency cannabis," he said. "Their research showed that 20 percent of homegrown marijuana was THC, and they were having significantly greater problems with this. Dutch government agencies have been saying this almost ought to be treated as a different drug."

Having identified an area on which they could work together, Walters and Hoogervorst drew up a joint statement. The agreement paves the way for a summit this fall between U.S. and Dutch researchers, information sharing between drug addiction experts and the assignment of a Dutch researcher to the National Institute on Drug Abuse.

"Does this represent any major change? The answer is no. What's significant is that both sides want to make peace," Reuter said. He also said that despite the accord on high-potency cannabis, there has been little action on the issues that so worried two successive U.S. administrations, even from the right-of-center Dutch government.

"My understanding is that this government is more cautious than its predecessor but has made no major changes to the law," Reuter said. "It has slowed down the program to switch methadone to heroin and has been under pressure to curb the use of cannabis coffee shops by foreigners, but changes have been modest."

Walters agreed. "The law hasn't changed dramatically, and we still have our differences. But I do think there's been both a change in circumstances and a change in officials," he said.

Ivo H. Daalder, a senior analyst at the Brookings Institution, cautioned not to overstate the role of drugs in the relationship between the two countries.

"Drugs have been an irritant in the relationship, but hardly the issue that defines it," Daalder said. "President Bush is more interested in whether they have troops in Afghanistan and Iraq, which they had until March. There are several issues like drug policy -- euthanasia, abortion and gay marriage, for instance -- where the two sides disagree, but they quickly put them aside and get on with being good allies."

John Walters, U.S. drug policy chief, co-announced the agreement.