By Andrew Quinn
WASHINGTON (Reuters) - The United States will drop sanctions on South Sudan after its independence on Saturday but expects more concrete steps from Khartoum to win its way off the U.S. terror blacklist, senior officials said on Thursday.
"The moment is approaching when a moment of peace is finally possible," the U.S. ambassador to the United Nations, Susan Rice, told a news briefing. "But let's be absolutely clear. This is a fragile and fraught moment as well."
Rice will lead the U.S. delegation to Saturday's independence celebrations in Juba, which will be South Sudan's capital, and Washington is redoubling its efforts to ensure that the fledgling country quickly gains its economic footing.
She also urged the government in Khartoum, the capital of North Sudan, to reconsider its threat to kick out U.N. peacekeepers after July 9, saying there were too many dangerous issues unresolved along the tense border between the two sides.
"The United States has been using all of our diplomatic and other instruments, as have the other permanent member of the Security Council ... to try to persuade the leadership in Khartoum that it is not in their interest that the U.N. be compelled to leave abruptly or prematurely," she said.
Rice said technical work was under way to drop South Sudan from U.S. sanctions imposed on Khartoum since 1993, which could open the door to more economic help.
Washington also will host an international conference in September to coordinate both public and private development projects for Africa's newest country, which hopes to diversify its oil-dependent economy into other areas including agriculture.
The United States pledged about $300 million in aid for South Sudan in 2010 and will unveil new pledges at the September conference, where South Sudanese leaders are expected to outline their plans for governance, accountability and transparency, U.S. officials said.
South Sudan voted to separate from the north in a January referendum promised under a 2005 peace deal that ended decades of civil war.
U.S. diplomats worked to ensure that the referendum went off peacefully, offering Khartoum the prospect of improved U.S. relations and eventual removal from the U.S. list of state sponsors of terrorism in return for cooperation on the vote.
Since then, however, the two sides have failed to permanently resolve a dispute over the border region of Abyei and seen fresh violence in South Kordofan state, another border flashpoint.
They also have not reached agreement on key issues including division of oil revenues and citizenship, any of which could be trouble in the future as the country divides into two uneasy neighbors.
Assistant Secretary of State Johnnie Carson, the State Department's top official for Africa, said Khartoum needed to follow through on all of these, as well as improve conditions in the western region of Darfur, before Washington could move on improving bilateral ties.
"We are working as hard we can with the authorities in Khartoum to make progress on these issues but we are not yet at the end of the line," Carson said.
The United States has pledged full backing for South Sudan, and will elevate its consulate in Juba to a full embassy following independence, Rice said.
Washington is also working to free the new country from sanctions imposed on Khartoum, although it was unclear how this might apply to South Sudan's oil sector, which produces 75 percent of overall Sudanese production but which exports through northern ports and refineries.
Jon Temin, the director of the Sudan program at the U.S. Institute of Peace, said the lack of clarity about how the two countries will manage their joint oil industry may be keeping this element off the table for now.
"I imagine this is part of the conversation on the whole oil equation," Temin said. "The general uncertainty probably limits the U.S. ability to do something definitive on oil because the deal has not been struck."
(Editing by Warren Strobel and Bill Trott)