Success of talks could lead to the lifting of crippling sanctions, writes Declan Walsh in Khartoum.
Strange things are happening in Khartoum, Sudan's giant, dusty capital sprawled along the banks of the River Nile.
Earlier this month a plane full of rebels landed at the city airport. Not long ago, they would have died in a fusillade of gunfire. Instead, they were feted like heroes. A government delegation warmly welcomed the rebels, who were whisked away to a five-star hotel.
Days later the American evangelist Franklin Graham, who heads the wealthy charity Samaritan's Purse, met President Omar el-Bashir. Mr Graham once described President Bashir as "evil" and called for US airstrikes against his regime.
But this time the two chatted cordially at the presidential palace, even swapping jokes about converting the other to Christianity or Islam.
After 20 years of bitter conflict, a giddy sense of looming peace is gripping Sudan. Negotiations between the Islamic government and the Sudan People's Liberation Army (SPLA) rebels have gathered a head of steam in neighbouring Kenya. Apparently, the pace is unstoppable.
"The agreement is coming, and it will usher in a new era of democracy in Sudan," said rebel spokesman Mr Samson Kwaje, sitting by the pool at Khartoum's Hilton Hotel, taking a break from a hectic whirl of meetings.
One of the toughest issues has already been hammered out. At the lakeside talks in Kenya Vice-President Ali Osman Taha and bearded rebel leader Mr John Garang agreed to joint rule for a six-year period, after which southerners will vote on whether to secede from the north.
Three thorny arguments are outstanding, including how to divide Sudan's ballooning oil revenues. The talks were expected to break yesterday without any further agreement, but both sides hope to have a deal early in the new year.
Peace would bring immediate dividends to the south, where decades of war have left most villagers living in Stone Age conditions.
Electricity and running water are unheard of in most areas. Hunger and diseases eradicated elsewhere - such as guinea worm - are still rife. While there are 6,000 kilometres of tarred roads in the north, there are just 10 in the south.
A peace deal would also signal a sea change in previously hostile relations with the US.
In the past decade the US has bombed a Khartoum factory suspected of manufacturing chemical weapons, imposed economic sanctions and put Sudan on its list of terrorist-sponsoring nations, alongside North Korea and Iran.
But since the September 11th atrocities, relations have warmed considerably. Sudan shared intelligence about Osama bin Laden, who lived here until he was expelled in 1996. In recent months staff levels have increased at the once-deserted US embassy, and President George Bush spoke with President Bashir by phone recently.
If the talks succeed, US officials hint, the crippling sanctions and terror tag will be lifted. "The bar for removal [from the terror list] is pretty high, and they are almost there," said Mr Gerard Gallucci, the US chargé-d'affaires.
The prospect of peace has also excited northern politics. When the rebels landed in Khartoum recently, white-turbaned Arabs lined up alongside the bareheaded southerners to welcome them.
"Democracy is not available here now. We expect it will come with the peace," said Mr Mohamed Ibrahim of the Umma party.
The political wild card is Dr Hassan al Turabi. The 71-year-old Islamic ideologue was instrumental in bringing President Bashir to power in 1989, but was arrested in 2001 after a falling out. The government released him again six weeks ago.
"Sudan is in a very critical phase, I have never seen anything like it," he said during an interview in the prayer room of his Khartoum villa.
Although once seen as a hardliner - linked even to Osama bin Laden - Dr Turabi says he now stands for democracy and pluralism. He signed a pact with the SPLA and his political party has even started canvassing for support in the south.
"In Islam it is like that - freedom for all parties, religions, groups and cultures," he said.
But if a settlement seems certain, peace is not.
Earlier this year a fresh rebellion erupted in the western Darfur province. Since then violence has spread throughout the region in a crisis that has affected over one million people, according to UN officials, of whom over 70,000 have fled across the border into neighbouring Chad.
Meanwhile, not all southerners are convinced of the Khartoum government's bona fides. On November 29th it banned for the seventh time in two years the Khartoum Monitor newspaper, which reflects mainly southern opinion. The government wants to stifle debate, said editor Alfred Taban in the deserted newsroom. It fears the south will secede after the six-year interim period.
"They can try to make peace attractive but there is a lot of bad blood. The southerners have already decided to leave," he said.