The collapse of Sudanese peace talks has delayed efforts by Arab states to fund the reconstruction of the war-ravaged southern part of the country.

The Sudanese government suspended the talks in Kenya on Monday after rebels seized the key garrison town of Torit in the far south.

A meeting of Arab League foreign ministers in Cairo, Egypt, was expected to discuss Sudan's economic rehabilitation as well as US military threats against Iraq and Israel's occupation of the Palestinian territories.

"The critical challenge that is facing us now is the threat directed at Iraq ... this constitutes a danger for the stability of the entire region," said Arab League Secretary-General Amr Moussa at the meeting.

The League is made up of 21 Arab states and the Palestinian Authority.

Buying votes?

Western diplomats and Arab officials had said Mr Moussa would press the ministers for funding for southern Sudan.

Khartoum doubts the SPLA's integrity

The reconstruction is part of efforts to persuade Sudan People Liberation Army (SPLA) and its supporters in the south to vote for unity in a referendum they have been promised if a peace deal is agreed.

Mr Moussa called for a quick return to cease-fire talks.

In neighbouring Egypt, President Hosni Mubarak said on Tuesday he would not support a peace deal in Sudan if it leads to a partition of the country.

Renewed talks

Khartoum's Islamic government said the renewed fighting showed the SPLA was not serious about a peace process.

In July, both sides announced a surprise outline of a deal on key issues of religion and self-determination for the south but not a ceasefire in the bloody 19-year civil war.

The US has played a leading role in brokering the July accord but lists Sudan as a state sponsoring terrorism and has imposed economic sanctions.

Sudanese Foreign Minister Mustafa Ismail has said he would discuss these matters with US officials on 15 September in New York during a UN General Assembly meeting.

Sudan's major industry is producing and exporting oil.