By Tiemoko and Diallo
BAMAKO (Reuters) - Mali's caretaker president Dioncounda Traore will have his mandate extended beyond a 40-day period expiring Monday after the soldier who led Mali's March 22 coup agreed to drop his objections to the move.
The accord between Captain Amadou Sanogo and mediators from the ECOWAS bloc of West African states keeps Mali's fragile transition to civilian rule on track and could open the way for the arrival of peacekeeping troops from neighboring countries.
"I can tell you that a deal has been reached in principle," Sanogo told state television late on Saturday.
"Of course we have a certain number of accompanying measures to put in place and we will remain in (the capital) Bamako the time it takes to ensure that, after these discussions, the institutions of state are stabilized," he added.
Sanogo handed over power to Traore last month as part of an earlier accord with ECOWAS that granted him the right to help shape the transition - a power he has wielded despite ECOWAS warnings of travel bans and asset freezes on him and his allies.
The agreement to extend Traore's mandate had been announced on Saturday by Burkina Faso Foreign Minister Djibril Bassole at a news briefing with Sanogo - who remained silent throughout.
Sanogo seized power in March in protest at the government's failure to end a Tuareg-led rebellion in the north, but the coup backfired and triggered an advance by rebels, some with links to al Qaeda, who now control two-thirds of the country.
The twin crises have raised fears among neighboring countries and in the West of the emergence of a new rogue state on the continent, as well as about Mali's economy, notably causing disruptions in its gold sector, Africa's third largest.
While Mali and its neighbors have no clear strategy so far for taking back the ground won by the northern rebels, the 15-state ECOWAS has said it is preparing to deploy troops that would seek to safeguard the transition back to civilian rule.
Paul Koffi Koffi, defense minister of current ECOWAS chair Ivory Coast, said it expected Traore to make the necessary request for the troops in coming days. He said ECOWAS could in the future open negotiations with the rebels, who have made a widely ignored declaration of independence.
"There are no negotiations for the moment because at the moment the priority is to stabilize the political process in Bamako," he said after ECOWAS meetings in Abidjan.
(Reporting by Tiemoko Diallo in Bamako and Ange Aboa in Abidjan; Writing by Mark John Editing by Maria Golovnina)