Sudan President Omar al-Bashir is supposed to meet with South Sudanese leader Salva Kiir in Addis Ababa on Sunday, the deadline imposed by the U.N., said Ethiopia's Foreign Minister Berhane Gebrechristos.
Ethiopia's newly elected prime minister has been pushing both sides to reach an agreement and is consulting with the leaders before they meet, Berhane said.
South Sudan suspended oil export in January and border clashes over disputed regions in April nearly escalated to all-out war between the neighboring countries. African Union peace talks have helped ease tensions with an oil exportation and revenue sharing deal reached in August, but Sudan insists it needs a border security agreement in place before allowing South Sudan to use its pipelines.
"The points are on the table and I think both (Sudan and South Sudan) are going to deal with the substantives issues in the afternoon," Berhane said. "We are quite hopeful and optimistic that things will move forward."
For weeks, negotiators from both sides have been holding talks in Addis Ababa to present a deal for their leaders to sign on Sunday. Earlier this week the negotiators told Ethiopia's prime minister that they are not close to settling the disagreements.
However, Sudan's defense minister and its chief negotiator told Ethiopia's Prime Minister Hailemariam Desalegn that a modality for trade between the two countries that includes the banking system and operations between the countries has been finalized, according to Ethiopia's foreign ministry.
The two sides have also agreed on independent administration of pensions, according to the ministry.
"In relation to the national debt, the two sides have agreed on a tentative scheme which the chief negotiator said now depends on the decision of creditors," according to the ministry. Sudan's chief negotiator Idriss Abdel Gadir said, "If all non-external debts are not cancelled by the creditors, Sudan has agreed to share the debts with South Sudan," the Ethiopian ministry said in a statement.
The two sides are still at odds over the disputed oil-rich Abyei region and other contested border areas. They must also still agree on a demilitarized border.
The African Union says the two leaders need `to take advantage of the unique opportunity' and reach agreement on all outstanding issues.
"Difficult decisions must be made by both sides to finalize negotiations on their post-secession relations," the AU said in a statement released on Saturday.
South Sudan broke away from Sudan last year after an independence vote, the culmination of a 2005 peace treaty that ended decades of war that killed more than 2 million people. Despite the treaty, violence between the two countries rose earlier this year, in part because the sides never agreed on the where the border lies, nor how to share oil revenues from the border region.
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