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Diana and Karungi were first seen together after a long time in a video shared after voting leaders of the Uganda National Musicians Federation (UNMF).
That day Karungi was elected the first vice president of the Federation, which is headed by Eddy Kenzo.
This week Diana was named the Federation's deputy vice president.
According to Sheebah Karungi, she and Spice Diana decided that working together had more benefits than staying apart.
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They both agreed they don't necessarily have to be friends to work on something that would benefit them both.
"As musicians, we don't have a problem with each other," claimed Karungi in a recent media interview.
"Spice has never done anything to me and I've also never done anything to her."
Sheebah Karungi appeared to say that the beef between them is generated by fans and some malicious external forces.
"After sitting down for a deeper reflection, we realised our problems are not about us. The problem is those who are stealing our money [implying those benefiting from their music royalties; one of the objectives of the Federation is to fight for rigorous copyright policies]."
She said there are negative forces that are trying to keep them apart so they don't focus on important issues.
"We agreed to put our differences aside," said Karungi. "We don't have to be friends to work together, but we can work on the same goal that benefits all of us and our children in the future."
It became clear that their relationship had soured when Spice Diana unfollowed Sheebah Karungi on social media.