WASHINGTON: President Barack Obama unveiled a US policy of engagement with Sudan, but warned Khartoum to expect a tough response if it ignored incentives to stop "abuses" and "genocide" in western Darfur.

Abandoning past attempts to isolate Sudan, Obama laid out a carrot-and-stick approach aimed also at ensuring that the country does not become a "safe haven for terrorists" and that a 2005 peace deal over a separate conflict in the south is fully implemented.

"We are looking to achieve results through broad engagement and frank dialogue," Secretary of State Hillary Clinton told reporters in presenting details of Obama's policy.

"But words alone are not enough," said Clinton. "Assessment of progress and decisions regarding incentives and disincentives will be based on verifiable changes in conditions on the ground."

Clinton said, for example, that the Obama administration would watch for "credible elections" scheduled for next year under a fragile 2005 Comprehensive Peace Agreement (CPA) that ended a 22-year civil war in the south.

The planned elections have already been twice postponed amid differences between the Khartoum government and the southern former rebel Sudan People's Liberation Movement (SPLM) over a planned census and a new electoral law.

US officials said Washington would engage in talks with members of the government in Khartoum other than President Omar al-Beshir, who faces an International Criminal Court arrest warrant on war crimes charges over Darfur.

In Khartoum, a top adviser to President Beshir, while calling the "genocide" label for events in Darfur "unfortunate," welcomed the change of tack by the Obama administration.

"Compared to previous policies there are positive points ... we don't see the extreme ideas and suggestions which we used to see in the past," Ghazi Salaheddin told reporters.

"I will say it is a strategy of engagement, not a strategy of isolation."

The United Nations says up to 300,000 people have died and 2.7 million fled their homes since ethnic minority rebels in Darfur first rose up against the Arab-dominated government in Khartoum in February 2003.

The government says 10,000 people have been killed.

A 22-year civil war in southern Sudan only ended in 2005, in what had been Africa's longest civil war. Elections are now planned in February and a historic independence referendum is due in 2011.

Flanked by Susan Rice, the US ambassador to the United Nations, and General Scott Gration, the special US envoy for Sudan, Clinton warned that the oil-rich south risked becoming a "flashpoint for renewed conflict," if further steps were not taken.

In a statement, Obama said the United States and the international community must "act with a sense of urgency and purpose" as they "seek a definitive end to conflict, gross human rights abuses and genocide in Darfur.

"If the Government of Sudan acts to improve the situation on the ground and to advance peace, there will be incentives, if it does not, then there will be increased pressure imposed by the United States and the international community."

Washington's international partners on Sudan include the other permanent members of the UN Security Council -- Russia, China, Britain and France -- as well as Sudan's neighbors like Kenya and small European countries like Norway.

Clinton spoke of both "political and economic" incentives and disincentives for Sudan, but pledged to keep details about them in "a classified annex to our strategy."

The chief US diplomat said the Obama administration, like the previous George W. Bush and Bill Clinton administrations, remained committed to using sanctions as a "tool" of its strategy toward Sudan.

But she also suggested US sanctions, imposed in the 1990s for Sudan's alleged support for terrorism, would be reviewed. Sudan gave refuge at the time to Osama bin Laden and others listed by Washington as terrorists.

"We want to take a hard look at these sanctions to make sure they are producing the kind of changes in conditions that we're looking for," she said.

In July, Gration said there was "no evidence" to support keeping Sudan on a US terrorism blacklist that triggers economic sanctions.