Sudans' leaders hold first talks since April clashes

ADDIS ABABA (Reuters) - The presidents of Sudan and South Sudan held a meeting at a hotel in the Ethiopian capital of Addis Adaba on Saturday, their first such talks since the two countries came close to war in April over a border dispute and oil revenues.

The face to face encounter between Omar Hassan al-Bashir and his southern counterpart Salva Kiir at the Sheraton hotel followed an African Union session in which both leaders committed to negotiating out their countries' differences peacefully.

A member of the South Sudanese delegation told Reuters the two presidents were meeting at the hotel.

The two leaders pledged at the AU meeting to shun confrontation in what diplomats hailed as an encouraging step towards a political settlement. But they had not shaken hands or talked face to face.

The neighbours, which made up Sub-Saharan Africa's largest country before South Sudan gained independence last year, face the threat of sanctions from the U.N. Security Council unless they peacefully resolve the border, oil and other security disputes by a deadline of August 2.

The Security Council has already expressed concern over delays in the negotiating process.

South Sudanese rebels fought the government of the largely Muslim, Arabic-speaking north for more than two decades in a bloody civil war that ended with a 2005 peace accord, opening the way for the independence of the South last year.

At the AU Council session, the two presidents pledged themselves to a "new spirit of strategic partnership", the AU's Peace and Security Commissioner Ramtane Lamamra told reporters.

He added this included a commitment "never again to have recourse to force to resolve their differences".

The two leaders had last met in March, before Sudanese and South Sudanese forces clashed over the disputed Heglig oil zone.

Norway's Special Envoy to Sudan and South Sudan, Endre Stiansen, said he welcomed the active participation of the African Union in encouraging the two Sudans to keep talking and avoid any return to conflict.

"We are getting to the end of the (U.N. Security Council) deadline and so it is essential that pressure is maintained on the parties," he told Reuters in Addis Ababa.

Stiansen said he hoped the two sides could settle their differences over the position of their border, how much the landlocked South should pay to transport its oil through Sudan, and the division of national debt, before Aug 2.

"There is nothing new on the table now. If they want to move, they can move," he told Reuters, adding that international donors were ready to support the peace process. (Additional reporting and writing by Pascal Fletcher)