The two men signed the deal at a meeting on Wednesday attended by US Secretary of State, Colin Powell in Kenya.

According to the accord both sides will continue with peace talks and thrash out an agreement to end fighting by the end of the year. Powell told both leaders that President Bush would extend an invitation to the White House once a deal had been reached.

Powell said that it was essential to move forward and pursue a just peace for the long suffering people of Sudan.

Fighting

Sudan's bitter civil war has been raging for 20 years, claiming the lives of an estimated 1.5 million people. Christian fighters in the animist south have been fighting against the Islamic government to gain control of the region.

Powell urged both sides to work towards ensuring that the people of Sudan ''experience a new way of life unclouded by the suffering of war.''

Previous talks

Last month, talks between both sides ended with an agreement to hold a referendum on the future of the south once security  is improved. A six year time table for a referendum has been outlined.

The peace talks in Naivasha, north of Kenya are expected to continue for a week. Among issues that are open to discussion are the distribution of Sudan's oil wealth and the long term future of the south of the Sudan.

Pariah state

In the past the US government has branded Sudan as a ''state sponsor of terrorism'', accusing Khartoum of allowing Palestinian resistance groups Hamas and Islamic Jihad to operate from the country.

Analysts believe that the US involvement in these peace talks is part of President Bush's ''war on terrorism''. Cynics believe that the move has more to do with ensuring that the US has access to Sudan's oil resources and supporting the Christian South.