ADDIS ABABA, July 21, 2008 (AFP) - African Union commission chief Jean Ping on Monday hailed Zimbabwe's ruling party and the opposition for signing a deal that would pave the way for talks to end a crisis in the country.

'The Chairperson of the AU Commission, Jean Ping, congratulates the Zimbabwean parties and urges them to build on this positive development and move forward towards a lasting and consensual solution,' a statement said.

Zimbabwe's President Robert Mugabe, Movement for Democratic Change (MDC) leader Morgan Tsvangirai and Arthur Mutambara, head of a breakaway MDC faction, sealed the document that paved the way for fully-fledged negotiations aimed at finding solutions to the country's political and economic woes.

'Today's event marks a significant step in the efforts aimed at overcoming the crisis facing Zimbabwe and promoting national reconciliation in the country,' the AU statement added.

The meeting between the two men was their first since Tsvangirai formed the MDC at the end of 1999.

The former trade union leader has twice been charged with treason and needed hospital treatment for head injuries last year when he was assaulted by members of the security forces ahead of an anti-government rally.

The MDC leader subsequently pulled out of a second round of voting at the end of last month after dozens of his party's supporters were killed in attacks that he blamed on pro-Mugabe thugs.

Ignoring widespread calls to shelve the ballot, Mugabe went ahead and staged the poll, winning a predictable landslide victory.

The 84-year-old has ruled the former British colony since independence in 1980.

Once seen as a post-colonial success story, Zimbabwe's economy has been in meltdown since Mugabe began a controversial land reform programme at the turn of the decade and inflation now stands at some 2.2 million percent.