Reuters 8:29 a.m. CDT, May 30, 2012

KHARTOUM (Reuters) - Sudan's army has withdrawn from the disputed region of Abyei bordering South Sudan, the United Nations confirmed on Wednesday, removing an obstacle to talks between the neighbors to end hostilities.

Sudan said on Tuesday its forces had left the border region, one of the main bones of contention between Khartoum and South Sudan. Sudan seized Abyei a year ago after an attack on a military convoy blamed by the United Nations on southern forces.

The neighbors countries came close to an all-out war last month when border fighting escalated, the worst violence since South Sudan became independent in July under a 2005 agreement that ended decades of civil war.

"The mission confirmed that the pullout was complete late Tuesday evening Abyei time," U.N. spokesman Kieran Dwyer said in an emailed statement.

South Sudan had already withdrawn its forces from Abyei, which is rich in fertile grazing lands and also has some small oil reserves. Ethiopian U.N. peacekeepers are based in Abyei.

Sudan's withdrawal cleared the way for talks sponsored by the African Union to end hostilities between the neighbors which resumed on Tuesday, the first time since fighting escalated last month.

Both delegations met again on Wednesday at the AU headquarters in Addis Ababa. The U.N. Security Council has called on both sides to resume talks and end fighting or face sanctions.

However, diplomats expect no quick breakthrough as both sides are at loggerheads over a long list of conflicts from marking the disputed border and deciding on the status of Abyei to agreeing on oil export fees for South Sudan.

The landlocked new nation inherited much of Sudan's oil reserves but needs to agree with Khartoum on an export fee. It shut down its oil production in January to stop Khartoum from taking some oil for what the latter called unpaid export fees.

(Reporting by Ulf Laessing; Editing by Alison Williams)