* SPLM's Arman dismisses scepticism over nomination

* Promises Darfur peace, reforms, an end to isolation

By Andrew Heavens

KHARTOUM, Jan 17 (Reuters) - The presidential candidate for Sudan's former southern rebels said on Sunday he would bring peace to Darfur, end Khartoum's pariah status, and win office with the backing of millions of marginalised Sudanese.

The Sudan People's Liberation Movement (SPLM) on Friday named Yasir Arman as its challenger against Sudan's incumbent President Omar Hassan al-Bashir in April elections.

Arman, a northern Muslim with political clout in Khartoum but little international profile, told Reuters his priorities once elected would include democratic reforms and a public acknowledgement that Darfuris had legitimate grievances.

The SPLM said its leader Salva Kiir would stand for the separate position of president of oil-producing southern Sudan, where the population has been promised a referendum on whether to split off as an independent state in January 2011.

Arman dismissed analysts' suggestions that Kiir's move meant the SPLM was more interested in building up its position in the south, before a widely expected "yes" vote for independence, than in ruling a unified Sudan.

"The fact that I am proposed is a big signal that the SPLM is an organisation where your ethnicity or religion does not make a difference...It is a national organisation," he told Reuters in an interview.

An estimated two million people were killed during more than two decades of civil war between Sudan's Muslim north and the south, where most follow Christianity and traditional beliefs.

A 2005 peace deal promised the election and referendum, and created an interim coalition government between the SPLM and Bashir's northern National Congress Party (NCP).

Arman, as the leader of the SPLM bloc in the Khartoum parliament, and the party's deputy Secretary General, is one of the group's most visible faces in the north.

Arman said he would reform Sudan's security services, bring in new human rights legislation, fight corruption and switch oil revenues away from arms towards agricultural development.

"Most of my support will come from people who want change ...I will focus on youth, on women, on marginalised people," he said, speaking from the southern capital Juba by phone.

Arman said he would also settle the Darfur conflict, which surged in 2003 when mostly non-Arab rebels took up arms against the government.

"They have legitimate demands. The Darfur issue is an issue of marginalisation," he said.

Arman would not be drawn on his policy towards the International Criminal Court, which issued an arrest warrant for President Bashir in March to face charges of orchestrating war crimes during a counter-insurgency campaign in Darfur.

Arman also stuck to the party line that he would campaign for the "voluntary unity" of Sudan, while respecting the final decision of the southern referendum. Most southerners and SPLM officials are thought to favour separation.

Arman said Sudan would become a "good neighbour" in the region "refraining from actions that would leave it standing alone when it comes to regional and international relations."

The United States imposed economic sanctions on Sudan in 1997 over its human rights record and alleged sponsorship of terrorism and tightened them further in 2007 over Darfur.