(Adds President Bashir, diplomats, previous EL FASHER)

By Louis Charbonneau

KHARTOUM, June 5 (Reuters) - Leaders from northern and southern Sudan are close to a deal on ending clashes over a contested oil town that have raised fears of a return to civil war, Sudan's president said on Thursday.

But southern officials were cautious and told Reuters that key issues still needed to be resolved.

Abdalmahmoud Abdalhaleem, Sudan's U.N. envoy, said Sudanese President Omar Hassan al-Bashir was planning to meet the leader of semi-autonomous South Sudan in Khartoum on Thursday evening and that "the (Abyei) situation is now moving to a solution."

Diplomats said southern Sudanese President Salva Kiir never left the southern capital, Juba, but that a delegation of southern officials met with their counterparts in Khartoum to work out the final details of a deal on Abyei.

Kiir is also first vice president of Sudan under a coalition government set up in a 2005 peace deal that ended more than two decades of north-south civil war.

Bashir confirmed in a meeting with the 15 U.N. Security Council members in Khartoum that the two sides were very close to a deal on Abyei.

"I am pleased to inform you that it (Abyei) will soon be settled through ongoing consultations between the two partners," he said in speech at the opening of the meeting.

South Africa's U.N. Ambassador told reporters after a closed-door question and answer session with Bashir that the president had told the council that a draft deal was expected to be presented to the south's legislative assembly on Friday.

If approved, it could become effective on June 10, Kumalo said.

Heavy clashes between northern and southern troops in Abyei last month killed more than 20 soldiers and forced tens of thousands to flee their homes. Analysts warned the situation could escalate and drag the region back into civil war.

At stake is control over a large part of Sudan's oil wealth. Abyei is surrounded by lucrative oilfields and includes a pipeline that analysts say carries about half of Sudan's 500,000-barrel daily output.

Kumalo did not know if all sticking points had been resolved in the draft agreement due to be submitted to the south's legislature.

It was unclear whether the northern and southern leaders had reached an agreement over the borders and administration of Abyei or on the withdrawal of troops both sides had been building up in and around the town.

Although the two sides have agreed to submit a dispute over the precise borders of Abyei to international arbitration, Kumalo said on Wednesday that Khartoum had informed the council that they had not yet agreed on an arbitrator to submit it to. (Additional reporting by Andrew Heavens; Editing by Sami Aboudi)

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