U.S. Secretary of State John Kerry has praised the signing of a truce between the government of Mozambique and the southern African country's chief opposition, Renamo, as "an historic step forward."

The peace accord is intended to end almost two years of hostilities between the two sides. It was signed in the Mozambican capital Maputo on Friday between President Armando Guebuza and Renamo leader Afonso Dhlakama, who came out of hiding on Thursday.

"This agreement underscores the power of negotiation and the possibilities for peace when a political leadership is committed to dialogue," Kerry said in a statement released Saturday.

He said free, fair and transparent national elections in October are a critical next step that should "help pave the way for a brighter, democratic future" for Mozambique.