"We are looking to achieve results through broad engagement and frank dialogue," Secretary of State Hillary Clinton told reporters.
"But words alone are not enough," said Clinton. "Assessment of progress and decisions regarding incentives and disincentives will be based on verifiable changes in conditions on the ground."
Clinton said, for example, that the Obama administration would watch for "credible elections" scheduled for next year under a fragile 2005 Comprehensive Peace Agreement (CPA) that ended the civil war in the south.
The planned elections have already been twice postponed amid differences between the Khartoum government and the southern former rebel Sudan People's Liberation Movement (SPLM) over a planned census and a new electoral law.
US officials said Washington would engage in talks with members of the government in Khartoum other than President Omar al-Beshir, who faces an International Criminal Court arrest warrant on war crimes charges over Darfur.
In Khartoum, a top adviser to President Beshir, Ghazi Salaheddin, described the "genocide" label used by the US for events in Darfur as "unfortunate," but said Obama's policy shift had "positive points".
"We don't see the extreme ideas and suggestions which we used to see in the past," Salaheddin told reporters. "I will say it is a strategy of engagement, not a strategy of isolation."
Princeton Lyman, a Council on Foreign Relations analyst, told AFP that "it is hard to know what is new" in the policy announcement because many details remain secret.
Lyman added that the previous administration of president George W. Bush administration had also engaged Sudan's leaders, even if the Obama team is a "little less denunciatory" in its approach.
The Obama administration is also "more active" in pursuit of a solution, because it is using a full-time envoy as opposed to a part-time one, said Lyman.
The United Nations says up to 300,000 people have died and 2.7 million fled their homes since ethnic minority rebels in the western region of Darfur first rose up against the Arab-dominated government in Khartoum in February 2003.
The government says 10,000 people have been killed.
Flanked by Susan Rice, the US ambassador to the United Nations, and General Scott Gration, the special US envoy for Sudan, Clinton warned that the oil-rich south risked becoming a "flashpoint for renewed conflict," if the 2005 peace deal is not fully implemented.
Under the agreement for the south, elections are now planned in February and a historic independence referendum is due in 2011.
In a statement, Obama said the United States and the international community must "act with a sense of urgency and purpose" as they "seek a definitive end to conflict, gross human rights abuses and genocide in Darfur.
"If the Government of Sudan acts to improve the situation on the ground and to advance peace, there will be incentives, if it does not, then there will be increased pressure imposed by the United States and the international community."
Washington's international partners on Sudan include the other permanent members of the UN Security Council -- Russia, China, Britain and France -- as well as Sudan's neighbors like Kenya and small European countries like Norway.
Clinton spoke of both "political and economic" incentives and disincentives for Sudan, but pledged to keep details about them in "a classified annex to our strategy."
The top US diplomat said the Obama administration, like the previous George W. Bush and Bill Clinton administrations, remained committed to using sanctions as a "tool" of its strategy toward Sudan.
But she also suggested US sanctions, imposed in the 1990s for Sudan's alleged support for terrorism, would be reviewed. Sudan gave refuge at the time to Al-Qaeda chief Osama bin Laden and others listed by Washington as terrorists.
In July, Gration said there was "no evidence" to support keeping Sudan on a US terrorism blacklist that triggers economic sanctions.
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