Complex sentence: With this new relation between East and West, the conflict over southern Italy was finally resolved: the Byzantine Empire accepted Otto's dominion over the principalities of Capua, Benevento and Salerno; in return the German Emperor retreated from the Byzantine possessions in Apulia and Calabria.
Split into simpler sentences: With this new relation between East and West, the conflict over southern Italy between the Byzantine Empire and the Holy Roman Empire was finally resolved. In return the German Emperor retreated from the Byzantine possessions in Apulia and Calabria.