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LIMA (Reuters) - Ecuador has suspended construction on a wall along a canal at its southern border with Peru, the two countries said on Thursday, after Lima had protested by recalling its ambassador to Quito earlier this week.

Peru thanked Ecuador for the gesture on Thursday, which came after the neighbouring countries' foreign affairs ministers met in Lima, and said on Twitter they would further discuss the wall later this month. Peru's ambassador to Ecuador will also return to Quito, the ministry added.

Ecuador's foreign affairs ministry confirmed the suspension of work on the wall, which is part of an urban planning project.

The diplomatic row marked a rough start to bilateral relations under Peruvian centrist President Pedro Pablo Kuczynski and Ecuador's socialist President Lenin Moreno, both of whom took office in the past year.

In the 1990s, territorial disputes led to a three-year war between the two countries, which share a 1,529-kilometer (950-mile) border.

Peru has said that construction of the concrete wall violates the countries' 1998 peace treaty because it comes too close to a canal in populated areas along the Zarumilla River, which forms part of the shared border.

Ecuador has said the wall would help control flooding that affects border towns every year, but Peru says it could disrupt the flow of water in the canal and raise flood risks for Peruvians.

(Reporting by Mitra Taj)

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