"They agreed to complete the dialogue process within the coming 60 days on what how, when and who... (for) the formation of the transitional government," Ethiopia's Hailemariam Desalegn said, after the rare meeting between President Salva Kiir and rebel chief Riek Machar alongside regional leaders.
A ceasefire deal signed by Kiir and Machar on May 9 has been repeatedly violated, deepening the crisis in the young nation which has already killed thousands and forced more than 1.3 million people from their homes.
Kiir and Machar met on the sidelines of a regional leaders' summit in Addis Ababa organised by the East African IGAD bloc, which is brokering slow-moving negotiations between both sides.
Hailemariam, speaking at the opening of the summit, slammed both sides in South Sudan for violating a ceasefire agreement signed on May 9.
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"There has been a growing tendency to continue with the war," Hailemariam said, but adding both Kiir and Machar had recommitted to the peace deal.
Delegates for Kiir and Machar have been meeting in luxury hotels in the Ethiopian capital since January, with both sides bickering over the agenda and even the venue of discussions.
Earlier, mediators issued a stinging rebuke of the rivals, accusing them of seeking military victory rather than a negotiated end to the civil war.