* Mali, Tuareg separatists to sign peace deal on Tuesday
* Draft deal had been blocked by Malian government
* Agreement would pave the way for planned July 28 election (Adds quotes from negotiator, MNLA comment)
By Mathieu Bonkoungou
OUAGADOUGOU, June 18 (Reuters) - Mali is ready to sign a deal with Tuareg separatist rebels on Tuesday, paving the way for Malian government troops to return to the rebel-held northern town of Kidal ahead of an election next month, Mali's chief negotiator said.
Bamako has made clear that it wants its civilian administration and army reinstated in the rebel stronghold before the vote, scheduled for July 28, that is meant to complete a democratic transition after a coup in March 2012.
The army had threatened to seize the town if no agreement was reached. It advanced towards Kidal in early June, wresting the village of Anefis from the MNLA Tuareg separatist rebels in the first clashes in months.
The Tuareg separatists regained control of Kidal, their traditional fiefdom, after Islamists withdrew following a French-led military campaign that ended the 10-month occupation of the northern two-thirds of Mali by al Qaeda-linked fighters.
Mediators, including delegates from the European Union and the United Nations, have worked round the clock to salvage the ceasefire deal.
Mediators said a week ago that both parties had reached an agreement "in principle".
However, Mali's interim President Dioncounda Traore, sworn in after the military coup, last week balked at a draft deal imposing conditions on the army's return to Kidal and he sent government representatives back to the negotiating table.
"The accord is ready to be signed," Mali's chief negotiator Tiebile Drame told Reuters in the Burkina Faso capital Ouagadougou where the talks have been taking place. "The interim accord will be signed this afternoon."
Burkina Faso's government said a ceasefire agreement would be signed at 1530 GMT.
Drame told Malian state radio earlier on Tuesday that they had reached an agreement on all outstanding issues.
"We agreed that Malian forces will return to Kidal soon as possible, followed by the administration and technical services. Now what remains is to agree on the practical details of the deployment," Drame said.
"Everyone also agreed to implement the other key element of the consensus, namely the requirement that armed groups in northern Mali give up their weapons," he said.
MNLA spokesman Mossa Ag Attaher told French radio RFI that they were working towards signing the deal.
There is widespread opposition in Bamako to any deal that would make concessions to the MNLA. The group is blamed by many in southern Mali for opening the door to the Islamists with an uprising last year and its leaders face arrest warrants for alleged crimes committed during their occupation of the north. (Additional reporting by Tiemoko Diallo in Bamako; Writing by Bate Felix; Editing by Daniel Flynn and Alison Williams)