Sudan said on Saturday it had reached a deal with South Sudan on oil transit fees, a first step toward ending a dispute which had brought the hostile neighbors close to war, but also said it wanted a border security agreement before oil flows resumed.

The shareout of oil revenues was one of the biggest issues left unresolved when South Sudan became independent in July last year, under a 2005 agreement that ended decades of civil war, and fighting along the ill-defined border pushed them close to war in April.

US Secretary of State Hillary Clinton said the oil agreement showed a "new spirit of compromise on both sides", and US President Barack Obama said Sudan and South Sudan should build on the momentum to resolve their remaining border and security issues.