As examples of progress, Ismail cited the end of Sudan's North-South war, an easing of the strife in the Darfur region and Sudan's cooperation with the U.S. in combatting terrorism.

"We feel that most of the obstacles that used to hinder normal relations between the two countries are no longer there," Ismail told reporters at the State Department after a meeting with Secretary of State Condoleezza Rice.

"So we urge the U.S. to lift the trade and economic sanctions on Sudan." He said Rice promised to review the sanctions issue.

The bulk of the sanctions are the result of Sudan's membership on the State Department list of state sponsors of terrorism. Even if Sudan were removed from the list, additional layers of sanctions would prevent the establishment of normal trade and economic ties.

It is highly unusual for a secretary of state to receive at the State Department an official from a country on the terrorism list.

In welcoming Ismail, Rice appeared to indicate satisfaction with progress to date in Sudan. The meeting also gave her an opportunity to encourage additional forward movement. Ismail met with Rice's top deputy, Robert Zoellick, on Thursday.

Last September, former Secretary of State Colin Powell said Sudan was guilty of carrying out genocide in Darfur. A U.N. commission later said Sudan was guilty of crimes against humanity.

Ismail pointed out that a new national unity government will be installed in Sudan on July 9, a step called for in the peace agreement signed with southern Sudanese rebels in January.

On Darfur, he said the presence of more than 2,500 African Union troops in the region have "remarkably improved" security there. He said 7,700 troops will be stationed in Darfur by August, and he held out the possibility of a peace agreement in the region by the end of the year.

Tens of thousands of people in Darfur have been killed and more than 2 million others have been displaced from their homes during a civil conflict that began in February 2003.

To the extent that security problems persist in Darfur, he said rebel forces have been inciting tribal warfare in the region.

If these activities cease, Ismail said, Sudanese forces could disarm the Arab militias that have been battling rebel forces in Darfur since February 2003.

He said he expects a successful conclusion to political talks in Abuja, Nigeria, aimed at reaching a settlement in Darfur. Discussions are now focussed, he said, on reaching agreement on a declaration of principles.

But Ismail denounced the rebels for running a "training factory" for an eastern Sudanese insurgency that operates out of neighboring Eritrea. He said four government soldiers were killed recently in a rebel attack in eastern Sudan.

Despite Ismail's optimism about the Abuja talks, Darfur's main rebel group threatened on Wednesday to quit the discussions, alleging fresh attacks on its positions.

Before Ismail met with Rice, State Department deputy spokesman Adam Ereli said the violence in Darfur persists but he indicated that both rebel forces and Arab militias were responsible.