Rivals Sudan and South Sudan face a deadline to resolve their differences by August 2nd. But tensions persist amid confirmation from the UN that Sudanese bombs have fallen on South Sudanese border territory.
The United Nations has confirmed that six bombs landed on South Sudanese soil last Friday. The government of Sudan insisted that they were aimed at rebels on its own territory.
UN observers, who visited the site, found six bomb craters just over a kilometer inside South Sudan's Northern Bahr el Ghazal state.
The UN team said the craters were almost in a line, possibly indicating a bombing run by an aircraft.
South Sudan officials insist the Sudanese military dropped the bombs from Antonov planes. According to the authorities, one man who was wounded in the bombing has since died.
Offer to raise oil transit fees
Sudan and newly-independent South Sudan are locked in disputes over oil transit fees, border demarcation and security. After clashes in April that pushed the two sides to the brink of war, the UN Security Council told them to hammer out agreements and handed down a deadline. Both sides have asked for it to be extended.
South Sudan has now offered to raise the transit fees it would pay Sudan for the use of its pipelines as part of a deal that would restart its oil industry. Both governments heavily depend on revenues from oil exports.
Pagan Amum, South Sudan's chief negotiator, told reporters that Juba was ready to resume oil exports if "reasonable" transport fees were agreed.
He said Juba would pay up to $9.10 a barrel to transit it's oil through Sudan. This was higher than an earlier proposal, but well short of Khartoum's demand for $36 a barrel.
South Sudan's package also included compensation of $3.2 billion to help Sudan make up for the loss in oil revenues. Three quarters of the oil fields are in what is now South Sudan.
Juba also said it would forgive a further $4.9 billion for what it refers to as overdue oil payments before independence and for oil confiscated by Sudan after independence. Sudan took some southern oil after failing to agree on a fee, prompting Juba to turn off all wells in January.
Sudan rejects offer
Other key proposals in South Sudan's offer include international arbitration within a strict time frame to determine where the common border lies in contested and often oil-rich frontier regions.
However, Sudan has dismissed South Sudan's latest offer insisting that the focus being shifted to security. Issues such as South Sudan's alleged backing of rebels needed to be addressed first, it said.
"We think security is a prerequisite" said Mutrif Siddiq, a member of Khartoum's delegation at African Union sponsored talks between the two Sudans in the Ethiopian capital Addis Ababa.
Those talks are being held to try and resolve a host of issues left over from the 2005 Comprehensive Peace Agreement, which ended a civil war between the two nations.
Adjoa Anyimadu is an expert on Sudan at the Chatham House think tank in the UK. She says the fact the talks are happening at all is positive. "The point is to stop the low level violence happening between the two countries", she told DW. "I think among some members of the international community there is the feeling that South Sudan is such a young country and that for it to be entering into any warlike situation so early on is a bad thing", she said.