"We believe with Obasanjo's intervention, the standoff over Chad will be resolved," a senior AU official, who did not want to be named, told reporters.
The stand-off over the involvement of Chad -- whose long border with Sudan runs along the western limit of the war torn region of Darfur -- is the latest in a series of disputes to have bedevilled the AU's stop-start dialogue.
Fighting has raged in Darfur since February 2003, when local armed groups launched a rebellion in the name of the region's black African tribes, alleging discrimination and persecution by Khartoum's Arab-dominated government.
Since the war began, between 180,000 and 300,000 people are thought to have been killed and 2.4 million displaced from their homes. Some 200,000 have fled into Chad.
Last year, the African Union deployed a small military observer force to Darfur and began a series of meetings in Abuja between the government and two rebel groups in order to seek a ceasefire and a political settlement.
AU spokesman Nouredine Mezni said that it was hoped that after the issue of Chadian involvement was resolved talks would move rapidly towards a common declaration of principles for future political negotiations.
"All-round consultations will continue today between the mediation team, the partners, observers, facilitators and the warring parties," he said.
While the rebel Sudan Liberation Movement (SLM) was reluctantly persuaded last week to accept Chad's role as a mediator, the JEM has held out, accusing N'djamena of favouring the government and seeking to undermine rebel unity.
"JEM was supposed to have made its submission last night, but it didn't. We expect it today," Mezni said.
"As soon as we have it, there will be a meeting of the mediators and partners to review JEM's document in the light of the earlier submissions of the two other parties," he said.
The declaration of principle, the basis for a future accord, reaffirms Sudan's unity and territorial integrity, respect for its ethnic and religious diversity and calls for an end to impunity for human rights violators.
AU mediators want these points agreed on before tackling the sensitive issues of power sharing, distribution of wealth and security.
On Sunday, JEM delegate Mohammed Tugod told AFP that the issue of Chadian involvement could derail the talks.
"There won't be any progress in the peace talks until Chad is asked to withdraw. This has been our position and nothing will change it," he said.
The AU-sponsored talks restarted on June 10 after a six-month hiatus. Earlier meeting had all broken down amid mutual accusations of ceasefire violations and human rights abuses.
The United States, the United Nations and independent aid agencies have accused government backed militias -- including the armed Arab horsemen known as the Janjaweed -- of carrying out indiscriminate attacks on civilians.