Sudan's Bashir pledges peace in first South Sudan visit since split - Reuters

The neighbors agreed in March to resume pumping oil through pipelines from south to north and ease the tensions which had threatened to reignite the war between them that had killed more than two million people.

Diplomats hope Bashir's visit will help the two sides overcome deep mistrust and solve their remaining disputes over the ownership of Abyei and other contested border regions.

Bashir, who canceled a visit to Juba a year ago when border fighting almost flared into full-scale war, said in a speech in the southern capital that he had ordered Sudan's borders with South Sudan to be opened for traffic.

"I have instructed Sudan's authorities and civil society to open up to their brothers in the Republic of South Sudan," Bashir said, alongside South Sudan's President Salva Kiir.

Kiir said he had agreed with Bashir to continue talks to solve all conflicts over disputed regions along their volatile 2,000 km (1,200 mile) frontier.

"Some issues need more discussions," Kiir said, adding that he had accepted an invitation from Bashir, who was walking on his trademark walking stick, to visit Sudan soon, his second trip since the secession.

Neither leader offered a solution for Abyei, a border region that contains fertile land, some oil and is highly symbolic.

After their meeting in the presidential palace, Bashir swapped his business suit and tie for a traditional white robe to join Friday prayers in the "Kuwaiti" mosque in central Juba.

"I came to Juba because we now have the biggest chance to make peace," he told 400 Muslim worshippers from South Sudan and the Sudanese expatriate community.

"We won't go back to war. President Kiir and I agreed that the war was too long," said Bashir, who last visited Juba to attend South Sudan's independence ceremony on July 9, 2011.

At a press conference, local journalists challenged Bashir for referring to the South's ruling party, the Sudan People's Liberation Movement (SPLM), as "insects" when emotions ran high on both sides during last year's border fighting.

"I didn't call the people of South Sudan insects...I cannot do this because I ruled them for 20 years," Bashir said, adding that he had only been making a play on the SPLM's Arabic name.

He said Sudan had been hurt when South Sudan's army in April of last year briefly seized the Heglig oilfield, which is vital to Sudan's economy. "There was no justification for this," he said.

"WE NEED PEACE"

In the ramshackle capital Juba, where main roads were closed and festooned with the flags of both countries, residents said they hoped Bashir's visit would finally bring peace.

"We need to live in harmony. We need peace between Sudan and South Sudan," said 22-year-old engineering student Robert Mori.

Edmund Yakani, head of the Community Empowerment for Progress Organization (CEPO), which promotes civil society values, said Bashir's presence showed he wanted peace.

South Sudan, the world's newest state, shut down its 350,000-barrel-a-day oil output in January 2012 at the height of a pipeline fee dispute, with devastating effect on both struggling economies.

The two sides subsequently agreed to restart oil shipments, grant each others' citizens residency, increase border trade and encourage close cooperation between their central banks.

Last week, South Sudan re-launched crude production with the first oil cargo expected to reach Sudan's Red Sea export terminal at Port Sudan by the end of May.

Both nations withdrew troops from border areas as agreed in an African Union-brokered deal in September. But they took until March to set up the demilitarized border zone, due to mistrust.

But even as Bashir's visit raised hopes of eased tension on Sudan's southern frontier, conflict has flared up again in its western region of Darfur, forcing some 50,000 Sudanese to flee into neighboring Chad over the past week.

Fighting has ravaged Darfur since 2003 when mainly non-Arab rebels took up arms against Sudan's Arab-led government, accusing it of politically and economically marginalizing the region.

The violence has fallen off from its peak in 2003 and 2004, but a fresh surge has forced more than 130,000 people to flee their homes this year, according to the United Nations.

(Writing by Ulf Laessing; Editing by Pascal Fletcher and Michael Roddy)