The Ugandan government and Lord's Resistance Army (LRA) rebels have signed a landmark agreement on how to deal with war crimes committed during the 21-year war in the north of the country.

The agreement was signed late Monday in the southern Sudanese town of Juba where the two sides have been holding talks for the last 19 months.

"We have agreed that severe crimes committed by the LRA during the war will be tried under a special division of the High Court in Uganda," said Captain Chris Magezi, the spokesman of the government delegation.

The agreement said that the special court division would also facilitate the protection and participation of witnesses, victims, women and children.

The LRA is notorious for brutal attacks against civilians, often burning them to death and hacking their limbs off. More than half of its fighters are believed to be children abducted from northern Uganda.

"Less severe crimes can be dealt with using Mato Oput (a traditional reconciliation mechanism used by the Acholi people of northern Uganda), or even junior courts," Magezi said.

The rebels are hiding out in north eastern Democratic Republic of Congo.

Rebel leader Joseph Kony and two of his commanders are wanted by the Hague-based International Criminal Court for war crimes and crimes against humanity.

The LRA has vowed not to sign a final peace deal unless Kampala can persuade the World Court to drop the case - something analysts say is unlikely.

The agreement does not mention in what court Kony could face trial but the rebels said they were satisfied with the deal.

"In negotiations you never get it all but the LRA is happy with the agreement and is committed to the contents," James Obita, deputy negotiator for the rebels, told Reuters over a telephone interview from Juba.

Mugezi said the talks, mediated by the Southern Sudan Vice President Riek Machar, would now move to the fourth stage of discussing a permanent ceasefire.

"This is a big success, we will in the same spirit start discussions on a permanent ceasefire and probably conclude the talks soon," he said.