* Sudan had ordered expulsion of all Kenyans, trade ban
* Kenya signals will not carry out ICC arrest warrant (Adds details, quotes)
By James Macharia
NAIROBI, Dec 2 (Reuters) - Sudan has lifted a package of punitive trade and political measures against Kenya after the countries defused a row over a Nairobi court order to arrest the Sudanese president, Kenya's foreign minister said on Friday.
The court this week ordered Kenya's government to carry out an International Criminal Court (ICC) arrest warrant against Sudanese President Omar Hassan al-Bashir if he sets foot in Kenya.
Sudan quickly announced the expulsion of Kenya's ambassador - and Bashir also initially ordered other reprisals, including the expulsion of all other Kenyans in Sudan and the cutting of trade, Kenyan Foreign Minister Moses Wetangula told reporters.
Wetangula said he and Kenya's Defence Minister Yusuf Haji met Bashir in Khartoum on Thursday night and managed to resolve the dispute.
"Sudan had set out a raft of reprisals against Kenya that would have had a negative effect on our economy and country ... We were able to stop these," Wetangula said, on his return to Nairobi.
Sudan had agreed to reverse its decision to expel Kenya's ambassador, said the minister. Asked whether relations between the two countries had returned to normal, he replied: "In a nutshell, yes."
He did not give details of what assurances he had made to patch up the disagreement, but signalled Kenya would stick to an African Union decision not to carry out the ICC warrant.
Asked if the government would arrest Bashir if he came to Kenya, Wetangula said: "If I was the one making the decision, I would not. I would advise the president not to arrest him."
"The Kenyan position is that of the African Union," he added.
The ICC has charged Bashir with masterminding genocide and other war crimes during his country's Darfur conflict.
As an ICC member state, Kenya is legally obliged to cooperate with the court and its arrest warrants. But the African Union has told its members to ignore the warrant, because of a perception the court is unfairly targeting African rulers and because it would destabilise Darfur.
Kenya has already been criticised by the ICC and foreign governments for failing to arrest Bashir when he attended a ceremony to enact a new Kenyan constitution in August last year.
Nairobi has since said it is appealing against the Kenyan court ruling that it carry out the ICC warrant.
Wetangula said Kenya would also have lost a key market for its tea, coffee and other products if the row had continued. Sudan bought tea worth ${esc.dollar}200 million from Kenya last year, but its exports to Kenya were negligible, he added.
Wetangula said Bashir had ordered that all flights by any airline taking off or destined to Kenya would not be allowed to fly through Sudan's air space.
Bashir had ordered all trade ties between Khartoum and Nairobi severed, and that all Kenyan nationals in Sudan - who he estimated at about 1,000 - be expelled immediately.
Bashir had also instructed that all Kenyan troops serving in a United Nations peace force in Darfur be expelled from Sudan, said the minister.
"In this time when Kenya is engaging with the Somali government troops against al Shabaab, the last thing we need as a country is additional enemies in our basket," said Wetangula.
Kenya ordered soldiers into Somalia in mid-October to crush the al Qaeda-linked al Shabaab rebels who it said had attacked its security forces and tourists inside Kenya. The militants want to topple Somalia's Western-backed government. (Editing by Duncan Miriri and Andrew Heavens)
Our Standards: The Thomson Reuters Trust Principles.
