WASHINGTON (Reuters) - The United States on Monday ruled out dropping North Sudan from a terrorism list, restoring a U.S. ambassador and taking other steps to normalize relations if Khartoum continues to occupy oil-producing region of Abyei.
Sudan's northern army on Monday vowed to hold territory it seized over the weekend in the disputed region, defying a U.N. demand it withdraw and pushing the north and south closer to conflict as the south prepares to secede on July 9.
Analysts fear north-south fighting over Abyei could reignite civil war, a move that would plunge the nation back into chaos as the south splits away and could send refugees back across the borders to neighboring African states.
U.S. Special Envoy for Sudan Princeton Lyman told reporters that the United States had started the process of dropping the North from the state sponsors of terrorism list, was weighing naming a U.S. ambassador to Khartoum after July 9 and had held talks with the World Bank about the North's foreign debt.
"These are all steps toward normalization. If we don't have a successful completion of the comprehensive peace agreement, if we don't have Abyei being negotiated rather than occupied, it'll be hard to move forward on those items because that's part of the road map (toward normalizing ties)," he said.
"You can't complete the road map if you can't complete these conditions," he added.
(Editing by Sandra Maler)