WASHINGTON, July 8 (Reuters) - The United States on Tuesday hailed Sudan's new election law, which paves the way for the first free ballot in 23 years in Africa's biggest state.

Sudan's parliament on Monday approved the measure, which will allow preparations for an election under terms of a 2005 peace deal which ended a north-south civil war and changed the way wealth and power are shared.

"The United States welcomes the passage of the National Electoral Law by Sudan's National Assembly. This is an important step in paving the way toward credible and peaceful nationwide elections in 2009," State Department spokesman Sean McCormack said in a statement.

"We recognize the efforts of all sides to forge a consensus and welcome a similar spirit of partnership as elections preparations move forward in earnest," McCormack said.

The United States called on Sudan to move forward with election preparations by quickly establishing a National Electoral Commission.

In addition, the State Department urged Sudan to allow access to domestic and international organizations that will help prepare for and observe the elections process.

"The government of Sudan should also put conditions in place including freedom of the media to ensure that political parties and civic groups are able to freely participate in the electoral process," McCormack said.

Sudan, under U.S. sanctions for more than a decade, has been in talks with the United States on normalizing relations. Before any deal, Washington wants to ensure lasting peace in the south and an end to conflict in the western Darfur region.

More than 2 million people died and 4 million were displaced in Sudan's north-south conflict, which is separate from continuing violence in the western Darfur region, where international experts believe more than 200,000 people have died 2.5 million been left homeless by five years of conflict. (Reporting by JoAnne Allen; editing by Todd Eastham)

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