With the African Union fielding troops to help quell the violence in Sudan's western Darfur region, where 2.2 million people are homeless and tens of thousands have died, the conflict of interest has put the alliance in a quandary.
Jan Pronk, the UN special envoy for Sudan, told a news conference in New York on Friday that the United Nations had not taken a position on the issue.
But he said: "I am being told that that decision is not going to be made in this African Union summit."
The summit begins in Khartoum on Monday among 53 nations.
Break of the tradition
Instead, he said, there was a possibility that Olusegun Obasanjo, the president of Nigeria, would continue to chair the alliance.
"I have also understood that the Sudanese, who have their contacts throughout Africa on this particular question are very well aware and also wise," Pronk said.
Augustine Mahega, Tanzania's UN ambassador, this month's UN Security Council president, said consultations on the new chairmanship were continuing, but acknowledged that Sudan's leadership would be a problem.
"It will create difficulties, and I think the consultations will take into account these difficulties," Mahega said.
"With the situation in Darfur, it obviously makes it very problematic, particularly if he were to assume the presidency"
Jendayi Frazer, the US assistant secretary of state
He said the tradition of the country hosting the summit taking over the top AU post was broken last year when Nigeria continued for a second 12-month term.
Libya hosted an AU summit in July but its leader, Muammar al-Qadhafi, faced enough opposition to keep Obasanjo in office.
Jendayi Frazer, the US assistant secretary of state, said the decision to host the summit in Khartoum was made because of last year's agreement between the government and rebels in the south and the "hope of peace throughout Sudan".
He noted that 7000 African Union troops and monitors were in Darfur to oversee a fractured ceasefire between the government and rebels.
"With the situation in Darfur, it obviously makes it very problematic, particularly if he were to assume the presidency," Frazer said.
"It may be a bit of a conflict of interest there."
The Darfur conflict began in February 2003 when rebels launched an uprising against Khartoum, accusing the government of marginalising the impoverished area.