The signing follows the government's June announcement that the ONLF faction had agreed to lay down arms, but the spokesman of the main group dismissed it as Addis Ababa's propaganda.

The ONLF has been fighting for the independence of the remote southeastern Ogaden -- a region rich in oil -- claiming they have been marginalized by the ruling regime.

In a major raid in 2007, the ONLF rebels attacked a Chinese-run oil exploration operation in the region, killing 77 people including nine Chinese nationals and prompting a government crackdown.

The barren Ogaden region has long been extremely poor, but the discovery of gas and oil has brought new hopes of wealth as well as new causes of conflict. Both the government and the insurgents routinely trade accusations or trumpet major military victories, but information on the region is very hard to verify because independent media access to the remote region is banned.

Under the peace deal, members of the breakaway faction are to benefit from immunity from prosecution and their movement is to turn into a political party.

The ONLF has said in the past that it was ready to talk with the government through the mediation of a third country, a request so far rejected by Addis Abeba.