The current crisis in Mali is one of the most serious challenges facing the continent, the head of the African Union commission Jean Ping told a meeting of heads of state in Addis Ababa

"The situation in Mali is one of the most serious situations our continent is confronted with," Ping said at the opening of a closed door meeting on Mali and on tensions between Sudan and South Sudan.

"The environment created in north Mali has become a refuge for terrorist groups... which constitute a serious threat to regional peace and security and international peace and security," Ivory Coast President Alassane Ouatarra, chair of the AU peace and security council, told the meeting.

Al Qaeda-linked Islamist fighters took advantage of the chaos following a military coup in the west African nation to seize key towns in the north. The jihadists have chased away Tuareg separatist rebels and have enforced strict Islamic law and destroyed ancient World Heritage sites they consider idolatrous.

Leaders underlined the need to restore security in the north of Mali and noted that the situation is further complicated by the absence of interim president Dioncounda Traore who has been in Paris since May 23 seeking medical treatment.

On the conflict between Sudan and South Sudan -- the other issue on the agenda for Saturday's meeting -- Ping said progress at AU-backed peace talks between the two countries has been slow.

"The progress and implementation of the roadmap has been slow and maybe even a little uneven," he said.

He said Thabo Mbeki, AU lead mediator between the two Sudans, would present his report on the situation to the summit.

The AU and the United Nations have passed resolutions urging the rivals to reach deals on security, oil sharing revenues and border demarcation by August 2. Talks have dragged in recent weeks, and although Khartoum and Juba agreed to a cessation of hostilities at the last round of talks, no concrete deals have been forged.

South Sudan's president Salva Kiir attended the opening session. His northern counterpart Omar al-Bashir arrived a little later.

Ping said the overall geopolitical situation on the continent over the past few months has been "mixed."

Among other flashpoints he cited was the east of the Democratic Republic of Congo where a group of army mutineers and former rebels known as M23 -- after the date of a failed peace deal -- recently seized a string of small towns from the regular army.

The heads of state and government are meeting on peace and security issues ahead of a two-day summit starting Sunday at which they will try to break their deadlock on the choice of a new commission chairman.