South Sudan Agrees Truce With Major Rebel Group

--South Sudan signs peace deal with largest rebel group South Sudan Democratic Movement

--Deal is a step toward restoration of peace in the oil-rich troubled Jonglei state

The government of South Sudan has signed a peace deal with one of the largest rebel groups, the South Sudan Democratic Movement, a South Sudan official said Tuesday, in a move that could help to stabilize the situation in the troubled oil-rich East African nation.

The peace deal was signed Monday after days of negotiations in the oil-rich troubled Jonglei state that borders Ethiopia, said Philip Aguer, spokesman for the South Sudan army.

"They [the rebels] have declared a ceasefire and as far as we are concerned, it's a major step toward the restoration of peace in Jonglei," he said by telephone from Juba, the South Sudanese capital.

The ceasefire between the government of South Sudan and the rebel group highlights the growing unity in the country, which has been plagued by clashes between rival groups in the Jonglei state in recent months.

South Sudan is a key regional oil producer, selling its crude oil to refiners in China and Malaysia, although a recent dispute with neighbor Sudan over oil export transit fees have led to a shutdown of its output helping to propel oil prices to near nine-month highs in recent days.

Analysts are unsure how long South Sudan, which gets 98% of its revenues from oil, will be able to pay its soldiers and how long the united front will last.

Luke Patey, a researcher on Sudan for the Danish Institute of International Studies, said the ceasefire doesn't change the outlook for South Sudan significantly, as ethnic fighting, rather than political factions, pose more of a threat to the country's stability.

South Sudanese troops have been battling the SSDM rebels since the country gained independence from Sudan last year and in December killed SSDM leader George Athor.

Following Athor's death, many rebel fighters have surrendered to government forces, Aguer said.

Pagan Amum, the chief negotiator for South Sudan and the head of the ruling SPLM party, said the ceasefire will help to stabilize South Sudan.

"This will bring the end of rebellions and will constitute the end of the destabilization of the larger part of South Sudan," he said.

"We, the government of South Sudan, will succeed in reconciling [with] the people in the state as well as proceed with peaceful disarmament of civilians, now that the external element has been removed," he said.

He added that the pact was significant because the rebel group was one of the conduits through which Sudan had sent arms to South Sudan.

Under the deal, more than 1,000 rebel fighters will now be integrated into the South Sudanese army and given political representation in the national assembly as well as at state level. A major disarmament program is also expected to be conducted to pacify the state later this year.

A rebel spokesman couldn't immediately be reached for comment.

According to Patey, given the long history of tension between rebel groups in South Sudan, the coalitions are fragile and subject to splitting, particularly when oil money is running dry and the Sudan People's Liberation Movement, a political party in South Sudan, can't afford to pay security forces at the same levels.

South Sudan is imposing austerity measures to counter the loss of oil revenues following the shut down of its output of around 350,000 barrels a day.

"It's a positive, definitely, that [South Sudan President] Salva Kiir has brought in one of the larger factions under the SPLM," Patey said. "But there are still different groups out there that need to be railed in."

-By Nicholas Bariyo and Jenny Gross; Dow Jones Newswires; 256-75-2624615; This email address is being protected from spambots. You need JavaScript enabled to view it..

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