Nairobi - The Sudanese government signed a peace treaty with southern rebels to end a civil war in a colourful ceremony yesterday, even as the United Nations warned that the war in Darfur in the west of the country was getting worse.

Ice-cream sellers and armed guards walked among the crowds as Colin Powell, the US Secretary of State, witnessed John Garang, the leader of the Sudan People's Liberation Movement, and Sudan's Vice-President, Ali Osman Taha, formally agree to share oil revenues, integrate their military forces, and form an interim coalition government. The mainly Christian south is to be exempt from sharia law which holds sway in Sudan's capital, Khartoum, and, after six years, southerners will also be given a chance to vote for secession.

Thousands of exiles who fled to Kenya to escape the fighting sat in the hot sun in a Nairobi football stadium, wearing Sunday best and watching dancers with tribal scarring on their faces and tin cans on their ankles, as the ceremony took place.

"I came here because I have prayed so hard to God to bring peace to Sudan and finally it is here," said Mary Nyachart, 36, who fled in 1997 after her village in Upper Nile province was attacked. "I am counting the days till I can go home again and help my country grow."

Almost five million people who fled their homes are expected to return to south Sudan, and millions of dollars in aid money will pour into the region. Sudanese government officials say they believe that if the oil-rich and fertile areas of south Sudan are rebuilt, the people will not vote to split from the rest of the country in six years.

But the celebrations in Nairobi were marred by a report released on Friday by the UN secretary general, Kofi Annan, who warned that the conflict in Darfur, which has already killed more than 70,000 people, is getting worse. In a report that will be discussed by the Security Council tomorrow, Mr Annan said: "I am concerned that we may move into a period of intense violence unless swift action is taken."

The African Union has promised to send more than 3,000 monitors and troops into Darfur but Mr Annan said only one-third of them had managed to get inside Darfur, and that the AU needed outside help to perform its duties effectively.

At a press conference held before the signing ceremony, General Powell said he hoped the peace deal would encourage the government and rebels to make peace in Darfur. International agencies said they feared that instead, the government would use the peace deal as a smokescreen to continue attacking rebels in Darfur and also in east Sudan where a new rebellion is brewing.

John Prendergast, a special adviser to the independent International Crisis Group, said: "The government's objective is to maintain power. Supporters of the peace deal need to understand it pursues contradictory approaches in different regions with different opposition elements to confuse outsiders and defuse criticism."