Hopes of an agreement were dealt another blow as President Salva Kiir and rebel leader Riek Machar pulled out of their discussions, promising to reconvene mid-afternoon.
"We are working very hard to meet the deadline, but there are still a number of remaining issues," a diplomat involved in the negotiations said.
"There's still a lot of hard work to do."
A deadline set by the east African regional bloc IGAD, which is mediating the talks and growing increasingly frustrated with the lack of results, expires at midnight (0230 IST).
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Kiir and Machar shunned the opening of talks on February 23, only met directly for the first time on Tuesday and broke off talks on Thursday.
"The two principles will meet again this afternoon after separate meetings with the mediators," said an IGAD spokesman.
IGAD chief mediator Seyoum Mesfin called this -- the eighth round of talks -- the "last chance" for ending the conflict and diplomats insist there will be no extension of the deadline.
"Doing that would undermine the current talks," said one diplomat. "We are focusing on reaching an agreement today."
South Sudan's war began in December 2013 when Kiir accused Machar, his former deputy, of planning a coup.
Fighting quickly turned ethnic with Dinka soldiers loyal to Kiir accused of massacring members of Machar's Nuer tribe in the capital Juba.
The violence spread and has been characterised by tit-for-tat ethnic murder, rape, pillage and the widespread use of child soldiers.
Peace talks were convened by IGAD within weeks of the outbreak of civil war but have only achieved a string of failed ceasefires and broken promises.