South Sudan offers Khartoum $3bn compensation

South Sudan has offered its neighbour Sudan more than $3bn (£2bn) in compensation for economic losses caused by the South's independence.

They are holding talks in Ethiopia in a bid to resolve bitter disputes ahead of a UN deadline on 2 August.

Juba also proposes an increased transit fee to move its oil through Sudan and says it will waive its claim to nearly $5bn it says it is owed by Khartoum.

Khartoum has not yet responded to the proposals.

South Sudan's chief negotiator, Pagan Amum, said Juba had tabled its "last offer".

"We are left with nine days [before the UN deadline]. It's time for the parties to conclude an agreement," he said.

South Sudan became independent from Sudan just over a year ago, but many disputes between them remain unresolved.

They include border squabbles and disagreements over oilfields, transport payments and divisions of the national debt.

The latest proposal includes compensation of $3.2bn - up from a previous offer of $2.6bn.

Sudan lost three-quarters of its oil production when South Sudan seceded.

The 67-page document also outlines security and border arrangements including arbitration mechanisms for determining which country owns several disputed areas.

South Sudan's proposal says these disputed areas should be demilitarised and jointly administered until their status is decided upon.

Both countries came close to all-out war when border fighting escalated in April.

The BBC's James Copnall in Khartoum says that, based on their past positions, the proposals are unlikely to be accepted as they stand.

The Sudanese want considerably higher oil transit fees and are unlikely to accept even temporary joint administration of areas currently under their control, such as the Heglig oilfields, he says.

Khartoum has denied it owes Juba money, which the South says is overdue oil payments and for oil confiscated after independence by Sudan.

However, the latest move appears to have given a fresh impetus to negotiations, our correspondent adds.

The separation between Sudan and South Sudan was part of a peace deal that ended decades of civil war.