by Fayez el-Zaki Hassan JUBA, Sudan, July 2 (Xinhua) -- As the referendum on the self- determination of south Sudan is approaching, the Sudanese government partners, namely the National Congress Party (NCP) and the Sudan People's Liberation Movement (SPLM), started intensive talks on post-referendum arrangements, amid speculations on endorsing confederation as an alternative for unity and separation options. The talks of the two sides, which commenced on Thursday in south Sudan and will be moved to Khartoum early next week, discussed strategic issues that, if not resolved, would pose a threat for return to war between north and south Sudan whatever the result of the referendum would be. The item of security arrangements remains the most complicated issue, as Sudan has three armies including the Sudanese Armed Forces of north Sudan, the Sudan People's Liberation Army (SPLA) of south Sudan, and the Joint Integrated Units which is consisting of equal components from the armies of north and south Sudan. The Comprehensive Peace Agreement (CPA), inked between north and south Sudan in 2005, stipulates that the joint integrated units shall constitute a nucleus of post referendum army of Sudan, should the result of the referendum confirm unity, otherwise they would be dissolved and the component parts integrated into their respective forces. This means demobilization of the joint forces, which may lead to security tensions. The second issue is the file of oil revenues sharing, where the two sides need to agree on the distribution of the oil revenues, presently and in the future. The water issue also emerges as one of the issues that need arrangements in case south Sudan seceded, whereas many of the Nile tributaries pass through south Sudan. There are also others issues concerning assets of the state, whether internal infrastructure assets or the external assets, in addition to the financial dues and the external debts, which amount to around 34 billion U.S. Dollars. Additionally, there are the issues of agreements and conventions, the currency and the banking system. Though the two partners surround their talks with confidentiality, leaking information indicated that agreeing on all the post-referendum issues would not be easy unless the two sides give concessions. The leaking information also indicated that the talks of the two parties will consider, for the first time, a new proposal for the future of south Sudan. The new proposal suggests adoption of 'confederation' on the base of a two-state system with a rotating presidency, as an alternative for the options of unity and separation. 'The issue of confederation is repeated by some leaders from the two sides, with side debate over the issue, but the proposal has not yet been presented at the leadership level,' Ali Tamim Fartak, a leading southern Sudanese member of the NCP, told Xinhua. 'The NCP is still proposing unity as an option for Sudan and is working to make it attractive. The ruling NCP has never adopted the confederation option but it will not close the door before any proposal which can be a national effort that contributes to preservation of Sudan's unity,' he added. The confederation system stands on the principle of a union between two or more states, under one Head of State. All these states integrate in the personality of one state that maintains the right to exercise the state's foreign affairs and external representation. However, each of the states of the confederation maintains its independence and its own internal system. Dr. Mohamed al-Amin Dafalla, a Sudanese political analyst, justified the confederation proposal at this time as an attempt to bring closer the stances of unity and separation advocates. 'This option represents a new proposal, as a third option, between those who dream that the referendum result would achieve unity between north and south Sudan and the realistic ones who believe that the referendum would lead to separation due to the high voices calling for separation, particularly among the southerners,' he said. 'This option combines the two stances of unity and separation via a model that is capable of bringing together the two contradicting stances. The confederation proposal will enable preservation of Sudan's unity and at the same time keep for south Sudan its independence from the north,' he added. Dafalla further believed that the standing situation between north and south Sudan was not much different from confederation, saying that 'the CPA has founded a kind of a union system that combines the constitution, the national level institutions and the legislative, executive and judicial powers.' 'The relation between the three levels (national, south Sudan, state) is a coordinating relation and based on contentment where the President of the Republic deals directly with the northern states governors, but can not deal with the southern states governors except through the First Vice-President who is the President of south Sudan government,' he added. It is known that south Sudan has its own banking system and army where the SPLM has the right to establish representing external offices that work in coordination with the Sudanese Embassies. South Sudan has also the right to obtain external loans, provided that south Sudan government commits itself to paying back those loans. 