Hopes for a breakthrough in peace talks on the Darfur conflict were dashed on Sunday night when two of the main rebel groups refused to sign a proposed agreement only hours before a deadline expired.

The Sudanese government and the rebels had been under enormous pressure from the United States, Europe and other African states to reach a deal over the conflict that has seen up to three million people displaced and tens of thousands killed. The African Union had set a deadline of midnight on Sunday night for agreement at the peace talks in Abuja, Nigeria, which had been running for two years.

The Sudanese government offered to sign the agreement, but two of the three main rebel groups, the Justice and Equality Movement (JEM) and a faction of the Sudanese Liberation Army, said late on Sunday night that they would refuse to accept the 85-page document in its present form.

Ahmed Tugod, the JEM chief negotiator, told Reuters: "We are not going to accept this document unless there are fundamental changes made."

The AU's deadline for a peace deal was set because of frustration at the lack of progress. Speaking before the rebel failure to sign, the AU said this was its final attempt to mediate a settlement and warned that it would not reopen talks on the fundamental issues if the deal was rejected.

Condoleezza Rice, the US Secretary of State, last week secured a Nato promise that the organisation would become more involved in trying to resolve the conflict. The United Nations is proposing to take over peacekeeping from the AU.

The question is a much bigger public issue in the US than in Europe. Thousands joined a protest on the Mall in Washington on Sunday calling for intervention. The actor George Clooney, who visited Darfur last week with his father, a former journalist, spoke at the rally. He said he had been moved by reading about the conflict, had got on a plane to Chad and then gone briefly over the border into Darfur. Another speaker, Elie Wiesel, the Nobel Peace Prize-winner and Holocaust survivor, said: "Darfur deserves to live. We are its only hope."

In Abuja, the head of the Sudanese government's negotiating team, Majzoubal Khalifa, said: "The government ... wishes to confirm its decision to formally accept this document and its readiness to sign." Khalifa said that "any difficulties that might come up in the implementation stages can be resolved by consensus between all the parties".

With humanitarian conditions continuing to deteriorate in Darfur, the UN last week warned that a surge in fighting had led to a third of the 2,4-million displaced people being cut off from aid. The World Food Programme said a lack of funds had caused food rations to be halved, even though malnutrition rates were rising.

Part of the JEM's concern is over the arrangements for the disarmament of the government-backed militias known as the Janjaweed. Diplomats at the Abuja talks said the rebels were also upset that their demands for a regional government and a new national vice-president from Darfur had not been met.

The conflict began in early 2003 when the rebels, accusing the government of discrimination and neglect, attacked a military base in Darfur. In retaliation, the government, which has a strong Arab bias, launched a scorched-earth policy against black civilians in Darfur. Military aircraft bombed villages, while the mainly Arab Janjaweed militia raped and pillaged. Up to 300 000 died by some estimates.

Despite a 2004 ceasefire and the deployment of 7 000 AU troops, fighting has continued. Since December 2005, more than 200 000 civilians have been displaced. A Human Rights Watch report last week said the government had bombed villages in south Darfur as recently as April 24.