LOME -- Ivory Coast and rebel negotiators edged closer to ending a war that threatened the stability of the entire region, with each side agreeing to free prisoners and the government promising safe passage of humanitarian aid to rebel-held areas.

The government also agreed at the end of three days of peace talks in Togo to draft legislation that would drop legal proceedings against soldiers in exile for past attempts to overthrow the government as well as those currently in prison for similar offences.

The talks were aimed at reaching a final peace deal after four weeks of fighting sparked by a failed September 19 coup.

"We have made a huge step towards peace," said Mohamed ibn Chambas, the top official of the Economic Community of West African States (ECOWAS) bloc which is mediating in the conflict, Reuters reported.

But the announcement late on Friday made no mention of meeting demands by the rebels for President Laurent Gbagbo to resign and allow fresh elections. Nor did the announcement address rebel disarmament, a key government demand.

The rebel's political representative, Guillaume Soro, warned that those issues would have to be addressed.

"Without political negotiations these accords will not stick," Soro told Reuters.

The conflict in the world's most important cocoa grower left hundreds dead, drove thousands from their homes and intensified ethnic tension between the country's mostly Muslim north -- now controlled by rebels -- and largely Christian south.

It was not immediately clear from the wording of Friday night's announcement whether the government's promise to drop legal proceedings against exiled or imprisoned soldiers would also apply to all rebels involved in the most recent coup attempt and the subsequent fighting. But the chief government negotiator, Laurent Dona Fologo, told reporters: "The amnesty is for everyone."

A truce agreed two weeks ago has held, but delegations made little progress for the first two days of peace talks in the Togolese capital Lome on fundamental issues behind the conflict.

Much of Friday was taken up examining grievances of rebel soldiers, some of whom say they were unfairly dismissed from the Ivorian army. "The trigger of this crisis was the grievances of the soldiers," Chambas said. "... We have reached an agreement on these issues satisfactory to both sides." Mediators said some of the tough political issues in the crisis had also been examined during the course of the third day. But a rebel source had said earlier: "Things are not going well."

Two senior rebel commanders returned to their northern stronghold of Bouake before the day's negotiations ended in order to brief fighters on the progress of the talks, the source said.

Both sides are under heavy pressure from West African leaders to come up with a deal. Ivory Coast is on a knife edge, but the cease-fire monitored by troops from former colonial power France has held for 14 days.

The measures agreed on Friday included a commitment by Ecowas to investigate allegations by both sides that mercenaries were used in the fighting.

A 2,000-strong West African force is being assembled to replace French soldiers on the front line within the next two weeks, but preparations for that mission are also running into snags.