(Updates with late evening agreement, details )

By George Obulutsa

ARUSHA, Tanzania, Sept 8 (Reuters) - Uganda and the Democratic Republic of Congo agreed on Saturday to make further efforts to rid their countries of rebel groups blamed for destabilising eastern Congo and to end their border dispute.

U.N. peacekeepers are struggling to preserve a shaky ceasefire in eastern Congo -- home to myriad militia groups -- after a dissident general accused government troops on Friday of breaking the truce.

The east has long been a tinderbox of wars and ethnic conflicts and Uganda has twice invaded Congo, saying it wanted to flush out rebels.

Congo says local rebels recruit from Ugandan refugee camps while Kampala believes at least three different Ugandan rebel groups operate in the area, including Lord's Resistance Army (LRA) leaders wanted by an international war crimes court.

The presidents of Uganda and Congo, meeting in northern Tanzania, signed an agreement to step up efforts to eradicate seven groups including the LRA and one led by renegade Tutsi general Laurent Nkunda, which they described as "negative forces".

"The parties undertake to strengthen efforts to eliminate all negative forces operating from the two countries," said the agreement, signed by Uganda's Yoweri Museveni and Congo's Joseph Kabila.

"The parties agree that the process of apprehension, demobilisation, repatriation, resettlement and reintegration of persons in the negative forces referred to shall, within 90 days from this agreement, be ... undertaken in either country."

Under the agreement, the two countries would deny sanctuary to any rebel groups and neutralise the LRA and a Congolese group, the Allied Democratic Alliance, by January 2008.

The two countries, whose relations have been fraught for years, also agreed to a review of their borders and to open full embassies to boost diplomatic relations.

Kabila and Museveni also discussed tensions over oil exploration in Lake Albert -- which straddles their two countries -- after an oil worker was killed last month.

The two countries agreed to collectively explore and use any petroleum in areas on their boundaries, and urged Congo to boost exploration on the Albertine basin.

"Where an oilfield is found to straddle their common border, the parties shall jointly explore and exploit the field and proportionately share the costs and proceeds."

The lake is a frontier in the quest for African oil with Heritage Oil <HOC.TO> and Tullow Oil <TLW.L> both drilling in concessions around the Albertine basin.

A British Heritage Oil contractor died on Aug. 3 when Ugandan soldiers and Heritage guards fought a gun battle against Congolese troops. Kinshasa says they are prospecting illegally in its waters.

Ugandan soldiers then captured two Congolese soldiers they said had illegally crossed the border.

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