Beshir has reportedly sealed the Kenya oil deal

Ford-Kenya Secretary General Gitobu Imanyara said it was hypocritical of the government to buy oil from the Khartoum government while attempting to play the role of an impartial mediator in the country's long-running civil war.

Energy Minister Raila Odinga reportedly signed the deal earlier this week in Khartoum with the government of President Omar al-Beshir

Kenya has hosted several rounds of peace talks aimed at ending Sudan's 19-year war between the Muslim government in the north and animist rebels in the south.

But critics say it is revenue from regional oil deals that perpetuates the conflict by funding the Khartoum government's continuing oppression of the south.

'Blood-oil'

"Ford-Kenya takes strong objection not only to the importation of Sudanese oil but also its sugar," Mr Imanyara told the Daily Nation newspaper.

The Catholic Church in Kenya as well as human rights organizations have urged President Daniel arap Moi to distance himself from the Sudan Government.

But Mr Odinga dismissed the label of "blood-oil", brushing aside arguments that it was wrong to buy it.

Odinga: the peace initiative is not compromised

According to the East African Standard, he said Kenya's commitment to the peace initiative was not incompatible with the promotion of bilateral trade.

Sudan's Oil Minister, Awad Ahmed Elijazz, said the deal would be an opportunity for the two countries to enhance trade as development partners.

President Moi was himself due in Khartoum on Wednesday to attend a meeting of the regional grouping, the Inter-Governmental Authority on Development (IGAD).

East Africa's leaders will discuss issues including the war on terrorism and the Sudan conflict.

Sudan's main rebel group, the SPLA, regards oil installations as a legitimate military target and has attacked several facilities, inflicting heavy casualties.

The SPLA said last month that government troops had launched a massive military offensive in defiance of a ceasefire brokered by US peace envoy John Danforth.

Sudan has evicted thousands of civilians from oil-rich areas to make way for oil installations, many of which are run by foreign companies.