Updated

Ivory Coast negotiators trying to end a four-month-old civil war that has left hundreds dead and thousands displaced have reached a draft peace settlement, Prime Minister Affi Nguessan said Friday.

He did not give details of the agreement but confirmed that it had been forged during peace talks outside Paris.

The accord seeks to resolve ethnic, regional and political tensions that have contributed to years of bloodshed in Ivory Coast, once regarded as a haven of stability in volatile West Africa.

Toussaint Alain, the official spokesman of Ivory Coast President Laurent Gbagbo, cautiously welcomed the deal.

"It is a step toward the return of peace in Ivory Coast," he said. "We welcome the accord with interest."

Toussaint refused to speak about specifics, other than to say that Gbagbo, who is due to hold talks with President Jacques Chirac in Paris later Friday, would remain in power.

"The final word on the accord lies with President Gbagbo and the Ivorian people, who need to be consulted on the implementation of some of its principles," he added.

Previous negotiations aimed ending the conflict foundered on rebel demands that Gbagbo step down as leader of Ivory Coast, the world's leading cocoa producer.

France-Info reported the negotiators agreed on the establishment of a government to include all political parties and representatives from the three rebel factions.

The transition government will be led by a prime minister with increased powers who will fix a date for new elections, France-Info radio said. Gbagbo's term expires in 2005, and the rebels' main demand was that he quit and allow new elections.

RFI radio reported that the accord called for disarming rebel forces under French supervision, restructuring the army and requiring candidates for president to be of Ivorian nationality, with a least one Ivorian parent.

The accord comes just hours after Ivory Coast Defense Minister Bertin Kadet demanded that France enter full-force into the war bloodying its former prize colony, saying Ivory Coast had come under attack from neighboring Liberia and France was obligated by treaty to defend it. The government says Liberians are fighting alongside the rebels.

Delegates from Ivory Coast's warring factions began closed-door talks 10 days ago at a sports stadium south of Paris. The French-brokered talks included representatives of the government and the three rebel groups fighting to oust Gbagbo, who came to power in flawed 2000 elections.

In Ivory Coast, a spokesman for the northern-based rebels said he still had concerns over rebels in the west, where sporadic clashes have continued despite a cease-fire agreement.

"If a deal is signed, we're OK with that," rebel leader Antoine Beugre said in Bouake. "It's at the level of application that there is still uncertainty. The development of the crisis in the west worries me. I can't understand why there's fighting there while negotiations were going on in Paris."

One of the observers at the talks, Mario Gido, a representative of the Sant'Egidio religious community, said the accord was reached in the early hours of Friday.

"Everybody signed and we celebrated with champagne. We embraced each other ... and many people were crying," he told France-Info.

Delegates had been discussing critical issues of Ivorian nationality and land ownership, and eligibility rules for presidential candidacy. Ivory Coast until now has barred opposition leader Alassane Ouattara, a former prime minister with heavy support in the rebellious north, from running, claiming his parents were not Ivorian citizens and he is therefore not a citizen.

The issue was the main spark behind ethnic, regional and political violence that killed hundreds in recent years, even before the outbreak of war.

The same rules have been used to bar countless people from owning land, even if their families have lived in Ivory Coast for generations.

The toughest issue in the talks has been Gbagbo's continued term as president. Negotiators had to resolve rebels' demand that he step down, and Gbagbo's insistence that he would serve until 2005.

Three rebel groups now hold half the country, while the government still controls the resource-rich south and the commercial capital, Abidjan.

The conflict began in September with a failed coup attempt against Gbagbo. Hundreds have since been killed and more than 600,000 displaced.

The talks were to be followed by a two-day summit of regional African leaders. U.N. Secretary-General Kofi Annan was to attend that meeting.

France has 2,500 troops in Ivory Coast enforcing a cease-fire.