For the first time in two decades of civil war, an official agreement was reached on Thursday with the northern Democratic Unionist party.
Sudanese Vice President Ali Taha signed the peace accord in the Saudi coastal city of Jidda with northern opposition leader Muhammad al-Mirghani, according to Sudan's ambassador in Riyadh.
To date, high-level peace talks held in Kenya have so far excluded northern rebels.
Al-Mirghani, who lives in exile in Cairo and Asmara, had recently warned his party's exclusion from the government's peace talks with the southern Sudan People's Liberation Army (SPLA) in Kenya augured badly for peace prospects.
But SPLA leader John Garang told journalists on Wednesday he was more optimistic about sharing power with President Umar al-Bashir and other political leaders.
Garang last met with al-Mirghani and Sadiq al-Mahdi, head of the Umma Party - the other main northern opposition party, last May in Cairo.
Talks with the southern rebels in Khartoum on Friday highlight the dramatic progress all sides have made toward ending hostilities in the two years since the United States threw its weight behind negotiations.
The ruling National Congress Party (NCP) has even offered full accommodation and transport to the senior SPLA delegates during their stay in Khartoum.
The United States expects a final agreement to end the war to be signed by the end of the year.
The visit is aimed at improving the atmosphere, building confidence and achieving national consensus, SPLA spokesman Yasir Arman said in an interview on Thursday.
President al-Bashir and Garang are
closer now than at any other time
Arman told independent newspaper Akhbar al-Yawm the delegation also seeks to transform the SPLA into a mass political movement that covers all regions of Sudan.
National elections are expected to follow the end of the war, though no date or even year has been set for them.
The talks are aimed at ending a war that erupted in 1983, when animists and Christians in the south demanded greater autonomy from successive governments.
The northern opposition groups joined the SPLA in 1995 in Eritrea in taking up arms against al-Bashir, but their unity lasted only a few months.
The outstanding issues are finding formulas to share political power, divide up oil wealth and determine the status of the capital Khartoum, as well as that of three disputed regions.
In Khartoum, SPLA representatives launched a media campaign on Wednesday, holding their first press conference since the war broke out.
Ramadan Muhammad Abd Allah, who identifies himself as SPLA spokesman, said his movement had operated here clandestinely for years, with members risking arrest, but could now go public because of progress toward peace.
He said the delegation would meet al-Bashir and other NCP officials as well as leaders of the opposition Umma, Democratic Unionist, Popular Congress and other parties in addition to heads of the civil society groups.