Both states have agreed to a security agreement which will include a buffer zone of peacekeepers[AFP]

Sudan and South Sudan have signed a border security agreement, marking a step towards improving ties after tensions built up for weeks over violence in border areas and the sharing of oil revenues.

The agreement was brokered by the African Union mediation panel led by South Africa's former president Thabo Mbeki, who labelled it as "successful".

Violence has flared up in two northern border states where the Sudanese army is fighting armed opposition groups.

Khartoum has accused South Sudan of supporting the rebels, a charge the South denies. 

But in the highest-level bilateral meeting in Khartoum since South Sudan's independence in July, both sides struck a conciliatory note and vowed to improve security in the ill-defined border area where many people just walk across or smuggle goods.

Sudanese Defence Minister Abdelrahim Mohamed Hussein told reporters on Sunday that 10 crossing points would be set up within a demilitarised zone on both sides of the 2,000km long border.

"This agreement will strengthen the exchange between the two people ... We don't see any conflicts," Hussein said after meeting his southern counterpart John Kong Nyuon, who added "without border security citizens won't be happy". 

About 300 joint teams, backed up by Ethiopian peacekeepers, will monitor the buffer zone from which both sides will withdraw forces, Hussein said.

The Ethiopians already monitor a ceasefire in the disputed border region of Abyei, which Khartoum took in May. 

The agreement signed in the presence of security officials from both countries aim to help end uncertainty over border security.

Both sides had agreed on the buffer zone at talks in Ethiopia in June as part of a framework agreement, parts of which were questioned by Sudan's President Omar Hassan al-Bashir. 

Hussein reiterated that both countries had agreed on 80 per cent of the marking of the border. Current border crossings have often been closed in recent months, hampering trade and travelling.

Oil dispute 

Both ministers declined to discuss violence in the northern border states of South Kordofan and Blue Nile where the army is fighting armed groups. 

Khartoum has accused South Sudan of supporting fighters in both states which are home to large communities who sided with the South during decades of civil war. 

The South became Africa's newest nation on July 9 under a 2005 peace deal with its former civil war foe Khartoum, but both sides have yet to resolve a large range of disputes.

Ending border tensions is one of the priorities. 

The 2005 peace deal ended decades of civil war that killed two million people, but Sudan and the South still need to settle many disputes, among them the future sharing of oil revenues, the main source of income for both countries. 

The South took 75 per cent of the 500,000 barrel of oil production but needs northern export facilities to sell it.

Both sides have failed so far to agree on a usage fee the South will have to pay Khartoum. 

Source: Agencies