KHARTOUM - The two main parties in Sudan's north and south agreed the terms of a controversial referendum on southern independence on Sunday, defusing a row that threatened a peace deal in the oil-producing nation.

The south's dominant Sudan People's Liberation Movement (SPLM) and the northern National Congress Party (NCP) have been at loggerheads over arrangements for the referendum and other looming votes, all promised as part of a 2005 accord that ended more than two decades of north-south civil war.

Amum said the laws would set out the terms of the southern referendum, a separate ballot on whether the oil-producing region of Abyei should join the south, and vaguer consultation exercises for the populations of the border regions of Blue Nile and Southern Kordofan.

The NCP and the SPLM, who fought each other during the civil war, joined a national coalition government under the 2005 Comprehensive Peace Agreement.

Analysts have warned of a risk of a return to conflict if the parties could not agree on the new legislation before national elections due in April, and the southern referendum in January 2011.

The referendum is one of the most divisive issues on Sudan's political calendar.