* President Kiir has declined to release the detainees
* Ceasefire deal in balance over the detainees issue
* Machar worried over Uganda troops in South Sudan
By Aaron Maasho
ADDIS ABABA, Jan 12 (Reuters) - South Sudanese rebel leader Riek Machar's demand for the release of detainees remains a stumbling block to a ceasefire deal aimed at halting violence in the world's youngest state, a U.S. envoy said on Sunday.
More than three weeks of fighting, often along ethnic faultlines, has pitted President Salva Kiir's SPLA government forces against rebels loyal to former vice president Machar and has brought the oil-exporting nation close to civil war.
Although both sides have held talks in recent days in Addis Ababa in a bid to agree a ceasefire, there has been little progress after Kiir refused a rebel demand to release 11 detainees arrested in December over an alleged coup plot.
On Saturday, three African envoys of the Intergovernmental Authority on Development (IGAD), a regional grouping of east African nations that initiated the talks, met Machar in an effort to agree the terms of truce, but he turned them down.
"Some of the major concerns he raised were the release of detainees which he has made a precondition since the beginning for the signing of the cessation of hostilities agreement," said Donald Booth, the U.S. envoy to Sudan and South Sudan, who accompanied the IGAD envoys.
"What we really need to do is continue to press the government to find a way to enable those detainees to participate in political talks."
Following the meeting with Machar, an IGAD official said on Sunday its envoys had once again travelled to South Sudan's capital Juba to try to convince Kiir to release the detainees.
"There was some progress with him (Machar) agreeing to some elements of the cessation of hostilities draft agreement. He still has disagreements so we will work on it," the official told Reuters.
The envoys have failed so far to have the detainees freed, with Kiir insisting that they will be investigated and those found culpable will face the due process of the law.
The fighting is the worst in South Sudan since it won independence from Sudan in 2011 in a peace deal that ended one of Africa's longest civil wars. The clashes have displaced more than 200,000 people and cut oil exports.
A copy of the ceasefire deal drafted by mediators envisages monitoring mechanisms to ensure full implementation.
Booth said Machar has also "expressed concern about Ugandan military intervention in South Sudan, and he expressed concern about whether a ceasefire agreement would be respected."
The rebels have accused neighbouring Uganda of aiding Kiir by launching air strikes against their positions, something Kampala denies. Ugandan troops patrol Juba's airport and guard the presidential palace, at Kiir's request.
"I don't think we are risking a deadlock. I think there's been progress in putting together a cessation of hostlities draft agreement," Booth said. (Writing by James Macharia; Editing by Rosalind Russell)