The AU's 7,000 peacekeepers on the ground have made little impact
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Sudan's President Omar al-Bashir has again been bypassed in his bid to become chairman of the African Union because of the conflict in Darfur.
Mr Bashir had been due to take on the role but it has instead been given to Ghana's President John Kufuor.
Chad had threatened to leave the AU if Mr Bashir became its leader.
UN chief Ban Ki-moon has held talks with Mr Bashir on a proposed joint UN-AU peacekeeping force in Darfur but Mr Bashir remains opposed to UN troops.
Mr Bashir has previously agreed to the existing AU force being beefed up, but questions such as the size of the force and who would lead it have not yet been settled.
Mr Ban said the 90 minutes of talks with Mr Bashir at the AU summit in the Ethiopian capital, Addis Ababa had been "useful" and "constructive" but it is not clear whether the outstanding questions were addressed.
Before the meeting, he had said he wanted concrete commitments from Sudan.
'Elation'
Mr Bashir has repeatedly denied backing the Janjaweed militias, accused of carrying out widespread atrocities in Darfur and says the problems there have been exaggerated.
Some 200,000 people have died and more than two million have fled their homes since the start of the four-year conflict.
Mr Bashir was originally due to become AU leader in 2006 but this was postponed by a year.
"Sudan has voluntarily accepted to decline in favour of Ghana," said Sudan's Foreign Minister Lam Akol.
"We chose Ghana to maintain the unity of the continent."
Mr Kufuor said he was elated to be called on to serve the AU.
The BBC's Amber Henshaw at the AU summit in Addis Ababa says there has been enormous pressure from other African countries, the international community, aid agencies and lobby groups against Mr Bashir.
One of the Darfur rebel groups had said AU peacekeepers would be treated as enemies if Sudan led the continental body.
'Scorched-earth'
Addressing African leaders before meeting Mr Bashir, Mr Ban called for more peacekeepers to be deployed urgently.
"Together we must work to end the violence and scorched-earth policies adopted by various parties, including militias, as well as the bombings which are still a terrifying feature of life in Darfur," he said.
The UN wants to deploy 22,000 soldiers.
The UN chief also called on the Darfur rebel groups who had not signed a peace deal with the Sudanese government to do so.
Instability in Somalia is also a prominent issue at the summit. Ethiopia itself played a major role in ousting the Islamist forces that had taken control of much of southern Somalia and supports the interim government.
Ethiopia has begun cutting its force levels in Somalia, making a proposed AU peacekeeping force for Somalia an even more pressing issue, correspondents say.
Officially, the AU agenda was to have been headed by climate change and scientific development, but BBC East Africa correspondent Adam Mynott says it is the other matters which are concentrating minds.
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