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Peace talks on Sudan's 11-year civil war collapsed after the Islamic military government refused to drop its stand on Muslim sharia law and self-determination for the mainly black South, officials said Thursday.

"It came to a deadlock because there was no compromise," said one African official close to the talks, which broke up late Wednesday in the Kenyan capital of Nairobi.The collapse effectively kills a regional peace initiative energetically pursued since last year by the Inter-Governmental Authority on Drought and Development of regional nations of east Africa and the Horn of Africa.

"It's extremely significant because the IGADD initiative was regarded as the greatest hope for years. What else is there now?" said a grim United Nations official.

Since the Sudan People's Liberation Army launched its war on the north in 1983, hundreds of thousands of civilians have been starved to death, killed in the crossfire and driven from their homes in the vast dust bowl of the South.

The rebel movement is now hated by some marginalized tribes and has splintered into several warring factions that prey mercilessly on civilians, press-ganging them into their ranks or living off their livestock and crops.

The talks' collapse could dash chances of Sudan's being rehabilitated by the West following Khartoum's delivery of veteran guerrilla Carlos "the Jackal" to French authorities last month.

Officials predicted that the United States would try to keep the government out in the cold, particularly in terms of economic aid and relations with the World Bank and International Monetary Fund.

The African official said the Khartoum government had shocked U.S. and other delegates because it had indicated it was softening its position on Islamic sharia law in the Christian and animist south.

Instead, the government delegation said only that non-Muslims would be exempted from sharia, which includes such punishments as stoning, lashing and limb amputation, rather than formally separating religion and state.

"They made it an issue of protection rather than rights," said the African official.

"Furthermore, they just didn't want to talk about self-determination," the official added.