By Ulf Laessing
ADDIS ABABA (Reuters) - Sudan's President Omar Hassan al-Bashir will hold a summit with his counterpart from South Sudan, Salva Kiir, in Ethiopia on Sunday to wrap up two weeks of talks to end hostilities between the African neighbors, state media said on Tuesday.
Diplomats had earlier said the former civil war foes Sudan and South Sudan were coming close at talks in Addis Ababa to a border security deal that would allow the resumption of oil exports vital to the economies of both countries.
South Sudan seceded from Sudan last year under a 2005 peace deal that ended decades of civil war but the two have yet to resolve a litany of issues related to partition. Border clashes almost boiled over into full-scale war in April, although tensions have abated since then.
Bashir had agreed to accept an invitation from Ethiopia to hold a summit with Kiir in Addis Ababa on September 23, SUNA said. It gave no details.
South Sudan's chief negotiator, Pagan Amum, told Reuters he needed to confirm the summit date with the government in Juba but added he was optimistic that the meeting would take place.
The summit news came after a Western official said both nations had made much progress towards a broader framework agreement to end hostilities, as demanded by the U.N. Security Council by September 22.
"We appreciate the strong efforts the parties have made towards the outstanding issues and we are confident that they will reach an agreement before the end of the deadline," said Endre Stiansen, Norway's Special Envoy for Sudan and South Sudan.
"And the summit is necessary to close this deal," he told Reuters on the sidelines of the talks.
Norway is a mediator in the talks because it advises both nations on oil issues and is respected as a neutral party.
"We've come a long way. There are still issues that need to be solved but it's doable. The atmosphere at the talks is positive," one diplomat told Reuters.
The landlocked South shut down its oil output - which accounted for about 98 percent of its state revenues - in January in a row with Khartoum over how much it should pay to export oil through the north to Red Sea ports.
But the two are "very close" to a final oil transport accord, another diplomat said, adding that the sides were discussing technical aspects of restarting production.
"Discussions for a final oil deal are in the last stage. There is no big obstacle left," the diplomat said.
Diplomats say the main goal now is to get Sudan to agree to a demilitarized border buffer zone, a first step toward settling broader disputes over the volatile, poorly demarcated frontier.
Sudan objects to a map proposed by the AU which puts a 14-km (8.7-mile) strip inside the South's territory. The land is fertile grazing ground for Arab tribes allied to Khartoum.
Diplomats said the two sides were discussing a deal that would see South Sudan's army pull out of the area, with its ultimate fate to be decided later.
"There is huge pressure on Sudan to say yes to the map. Experts are now discussing how to work around Sudan's security concerns," said a diplomatic source close to the South's delegation. "If Khartoum says no they will be blamed for the failure so they will probably move towards a compromise."
Once a buffer zone has been agreed, southern oil exports can resume, which would give a lift to both economies and an incentive to both sides to keep discussing other, more complex issues. But one of the most daunting - the fate of the contested Abyei border region - will not be solved in this round of talks.
Western powers hope for more significant progress once the sides agree to resume oil exports, which would take several months because the pipelines were flooded with water and some oil fields damaged during fighting in April.
(additional reporting by Mading Ngor in Juba and Khalid Abdelaziz in Khartoum; Editing by Alexander Dziadosz and Rosalind Russell)