Sudan, South Sudan move towards security deal as UN deadline expires - Reuters

Sudan's President Omar Hassan al-Bashir and his southern counterpart Salva Kiir are expected to hammer out the border agreement in Addis Ababa on Sunday, to meet a deadline set by the U.N. Security Council.

The neighbors reached an interim deal in August to revive southern oil exports that must transit the north to reach Red Sea ports. But Sudan has insisted on first reaching a security accord - something which both parties have been unable to agree during two weeks of talks.

Hours before the U.N. deadline expired, Sudan's delegation said it had conditionally accepted a proposal by the African Union, already agreed by South Sudan, to create a demilitarized zone along the entire border. It had previously objected to the zone running through one 14-mile long strip of grazing land.

"There is a proposal to accept this sector of the map with some special arrangements, military and administrative arrangements," Badr el-Din Abdallah, spokesman for the Sudanese delegation, told reporters at the talks in Addis Ababa.

Atif Keir, spokesman for South Sudan's delegation, said talks were ongoing through the evening.

The African neighbors came close to war in April in the worst outbreak of violence since the mainly Christian and animist South Sudan seceded from mainly Muslim Sudan in July 2011 under a peace pact that ended decades of civil war.

Tensions had escalated in January when South Sudan shut down its oil output of 350,000 barrels a day to stop taking Sudan oil as compensation for what the latter called unpaid export fees. The shutdown sent both economies into turmoil.

While a security deal is a step towards ending hostilities, Bashir and Kiir are not expected to reach final agreement on other issues left over from the nations' messy split, such as the fate of disputed border regions.

(Reporting by Ulf Laessing; Editing by Pravin Char)