Mohammed Osman al-Mirghani, who chairs the opposition National Democratic Alliance (NDA), and Sudanese Vice President Ali Osman Taha signed the document during a ceremony at a conference centre in Cairo.

"We are starting a new era where Sudan is free of struggle... Let us work hand in hand to offer the Sudanese the prosperity they have been lacking," Sudanese President Omar al-Beshir said Saturday.

"This latest agreement clinched today will be the backbone of Sudanese unity," he added after the signing, which was also attended by his Egyptian counterpart Hosni Mubarak.

The agreement was widely seen as the most significant development in Sudan since the January 9 North-South peace deal and comes amid growing international pressure for a solution in war-torn Darfur.

"The Sudanese people are the main beneficiary of this agreement, which heralds a new era in which all of us have to cooperate to achieve global peace, strengthen the march towards real democracy," Mirghani said.

"A sense of trust has been regained between the different partners in Sudan... This is a historical day for the Sudanese people," said Taha.

However, NDA vice-chairman General Abdel Rahman Saeed told AFP "two problems remain on the fate of NDA forces and the power-sharing quota granted to the opposition in the interim institutions."

The NDA came to Cairo hoping to have its forces assimilated in the regular army and the share of power it was granted in the January North-South agreement increased significantly from its current level of 14 percent.

"We have an agreement on the fact that the reconciliation agreement signed today will only be effective when a written deal is reached on both these issues," Saeed said.

Saturday's signing ceremony comes less than six months after Khartoum signed a peace agreement with southern rebel leader John Garang, ending 21 years of civil war that killed and displaced millions.

Garang, whose Sudan People's Liberation Movement is also an NDA member, praised Egypt's role in brokering Saturday's deal and urged the Arab world to assist reconstruction efforts.

All the participants also voiced their hope that the end of the 16-year feud between the NDA and Beshir's regime would boost chances of a breakthrough in ongoing talks to solve the crisis in Darfur.

"We are very hopeful that efforts under way in Abuja will now be crowned with an agreement for the stability and security of the people in Darfur," Beshir said.

The main Darfur rebel group, the Sudan Liberation Army/Movement, is officially a member of the NDA but has been engaged in its own round of stop-and-start negotiations with the government in Nigeria.

The movement welcomed the Cairo agreement but warned Sudanese unity would not be achieved until the conflict in Darfur was solved.

"We welcome the signing of this agreement but we stress that there can be no global peace in Sudan unless our people in the East, in Darfur and in Kordofan (centre) obtain their fair share of the country's power and resources," SLA/M chairman Abdel Wahed Mohammed Ahmed Nur told AFP.

The NDA was formed by 13 parties that united in 1989 to oppose the regime only weeks after Beshir seized power in a military coup.

Besides the SPLM, the NDA includes Mirghani's Democratic Unionist Party, one of Sudan's oldest political movements which draws support from the powerful Khatmiya brotherhood, as well as the communist party.

Saturday's agreement involves the subsequent dissolution of the NDA in its current form and will eventually bring some of its members into the interim executive.

The current parliament, dominated by Beshir's National Congress party, is due to be dissolved in the coming days, after it ratifies the North-South peace agreement.