Sudan's government and main rebel group signed a key security deal on Thursday, clearing a major stumbling block in peace talks aimed at ending a 20-year-old conflict that has killed some two million people.

"This is a historic occasion. It has paved the way for a peace process and stability in Sudan," Sudan's First Vice President Ali Osman Mohamed Taha told reporters.

"We have got miles to cover ahead. What has happened gives us the drive to negotiate on other issues."

Witnesses said delegates clapped as representatives from the government and the rebel Sudan People's Liberation Army (SPLA) signed the deal near Lake Naivasha, some 55 miles northwest of Kenya's capital Nairobi.

Security has been the biggest sticking point in three weeks of talks between Taha and John Garang, head of the SPLA, to resolve Africa's longest war.

However differences remain on a host of other issues, ranging from the status of the capital Khartoum to how to share power and wealth from the south's lucrative oilfields.

"There is no doubt that the issue of security has been a difficult one," said Kenyan chief mediator Lazaro Sumbeiywo.

"However the courageous decision on the status of the two armed forces, cease-fire, redeployment... is a clear demonstration that the Sudanese have jointly decided to cross the bridge of peace together," he added.

The United States applauded the agreement and encouraged both sides to keep up the momentum.

"We have urged both leaders to capitalize on this historic achievement and negotiate the remaining details of a final peace accord. Both sides have committed publicly to bring the process to closure as rapidly as possible," the State Department said in a statement.

Peace has eluded Sudan despite years of efforts to end the civil war, which broke out in 1983, pitting the Islamist government in the north against rebels seeking greater autonomy in the mainly animist and Christian south.

In a notable breakthrough last year, the two sides agreed to give southerners the right to a referendum on secession after a six-year transition.

In New York, U.N. Secretary-General Kofi Annan commended both sides and urged them "to sustain the pace of the talks and reach a speedy settlement of the conflict," a spokesman said.

SECURITY DEAL

The security deal provides for two separate armies with the creation of integrated units comprising government and SPLA troops during the interim period.

A copy of the deal obtained by Reuters shows that an integrated force of 24,000 troops would be deployed in the south. Another unit of 3,000 troops would be sent to Khartoum.

Two integrated units of 6,000 troops each would be sent to the disputed Nuba Mountains and Southern Blue Nile, which along with Abyei, are regions claimed by both sides.

The government would have up to two and a half years to pull its troops out of southern Sudan, while the SPLA agreed to withdraw from eastern Sudan within a year of the interim period.

Both sides also agreed to an internationally monitored cease-fire that would come into effect once a final peace deal is signed.

"We have responded to the wish of the Sudanese people for a fair and just political settlement that is durable and this agreement is a basis for such a fair and just settlement," Garang said.

SPLA officials said both delegations planned to adjourn talks on Saturday but they had not yet decided when negotiations would resume.

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