* Neighbours at odds over border, oil fees, land
* Two sides came close to conflict in April (Adds timetable for troop withdraw)
By Aaron Maasho
ADDIS ABABA, March 8 (Reuters) - Sudan and South Sudan agreed on Friday to order their forces out of a demilitarised border zone within a week, a mediator said, possibly opening the way to the resumption of oil exports from the south.
South Sudan seceded from the north in 2011 after decades of war but border disputes and disagreements over oil pipeline fees have dragged on, delaying much-needed economic development.
The landlocked South shut down its oil production of 350,000 barrels per day more than a year ago during a row over how much it should pay the north to pipe its crude to a coastal terminal for export.
With oil the lifeline of both economies, the move has strained their state budgets, weakened currencies, stoked inflation and worsened economic hardship.
Defence ministers from both sides met on Friday for a new round of talks in Addis Ababa to set up a buffer zone along their frontier.
Former South African President Thabo Mbeki, who chairs an African Union mediation panel, said the two had agreed to order their forces out of the demilitarised zone by March 14.
"D-day is March 10. The agreement calls for immediate orders(for withdrawal) to be issued within d-day plus four days," he told a news conference in the Ethiopian capital.
The two countries will finish withdrawing their troops from the demilitarised zone by April 5, according to a timetable agreed by both sides seen by Reuters.
The former civil war foes have made a number of agreements about border security in the past, but have failed to implement them.
After teetering on the brink of full-scale conflict in April with the worst border clashes since their split, the two countries agreed in September to set up a buffer zone, which could defuse tensions enough for the South to resume oil output.
But neither side had pulled its army back from the almost 2,000-km (1,200-mile) border due to the mistrust left over from one of Africa's longest civil wars.
Friday's talks were the first in nearly two months. Two meetings between Sudan's President Omar Hassan al-Bashir and South Sudan's Salva Kiir in Addis Ababa in January failed to break the stalemate.
Animosity runs high between Bashir's government in Khartoum and his former foes up the Nile in Juba.
Nearly 2 million people died in the north-south civil war, which left South Sudan economically devastated and awash with guns.
Khartoum accuses Juba of backing rebels of the Sudan People's Liberation Movement-North (SPLM-North) in South Kordofan and Blue Nile, two Sudan states bordering the South.
The SPLM-North, made up of fighters who sided with the South during the civil war, controls part of the Sudan side of the border, which complicates setting up the buffer zone.
South Sudan has denied supporting the rebels. (Reporting by Aaron Maasho; Editing by Alexander Dziadosz and Jon Hemming)