First Vice-President Ali Osman Mohamed Taha and rebel Sudan People's Liberation Army (SPLA) chief John Garang, along with their aides, have been locked in negotiations over the past nine days in Kenya.
Both sides claim suzerainty over the Abyei, Nuba Mountains and Southern Blue Nile regions.
“There was a setback yesterday (Thursday) on wealth- and power-sharing and the three areas -- Southern Kordofan, Southern Blue Nile and Abyei," an official of the Khartoum government, who declined to be named, told Reuters.
“The SPLA prepared a paper that contradicted what we had agreed upon,” he added.
“The talks are delicately poised, as both sides are reluctant to let go their initial positions, but the sides are anxious to reach an agreement as soon as possible”
Talks were also stalled over the issue of the two respective armies co-existing over an interim six-year period of self-rule for the south, agreed to at an earlier round of talks.
“We must agree on security arrangements first because it will be the essential guarantee that both sides will respect the peace agreement after it is signed,” other Sudanese officials, who also sought anonymity, told AFP.
“It will also be an assurance that the agreement will be implemented after signature," they added.
Khartoum is pushing for the South to agree to dismantle its army. If it doesn’t, the North argues, rebel leader John Garang will seek autonomy for the oil-rich region.
Still, Nicholas Hayson, an adviser to Sumbeiywo – chief mediator for the Inter-Governmental Authority on Development (IGAD), said the disagreements were not irreconcilable.
“The talks are delicately poised, as both sides are reluctant to let go their initial positions, but the sides are anxious to reach an agreement as soon as possible,” Hayson, a former lawyer to retired South African president Nelson Mandela, told AFP.