Apple and Google have been fighting it out over patents ever since Android devices went on sale. Until today, that involved more than 20 ongoing lawsuits (in the US and Germany) between the two technology behemoths. In a joint statement earlier today, Apple and Google have announced all that is over. They will be ending the patent cases and will instead work to reform patent law.
This certainly sounds great, but it's probably not as significant as you're imagining. Apple and Google aren't entering into any sort of cross-licensing agreement. They simply won't fight about patents in the courts anymore. This deal ends direct litigation between Apple and Google, but also the cases between Apple and Motorola (which it still technically owns). What it does not do is end any of the cases Apple has pending against other Android OEMs.
While Apple and Google are technically calling it quits in the courtroom, Google is still doing battle with a company Apple owns a piece of. The Rockstar Consortium was formed by Apple, Microsoft, BlackBerry, Ericsson, and Sony to acquire the Nortel patents in 2011. Rockstar sued Google last year with those patents in hand, and those cases will continue to run their course.
Neither company has gone into detail about why now was the time for a truce, but it's probably due to a variety of factors. Apple likely doesn't see patent suits as a viable way to combat Android's rise anymore – Android has risen. It's done. The recent Samsung judgment awarded Apple only $119 million in damages, which is hardly worth its time. These cases aren't cheap, after all. Google is also selling Motorola to Lenovo, which makes it a much less attractive target for lawsuits (although Moto actually started that one). Google itself faced resistance in the EU for some of its Motorola cases, which largely revolved around FRAND patents that are required for interoperability.
Whatever the reason, it's good to see Apple and Google playing nice. Let's just see how long it lasts.