ADDIS ABABA: Talks resumed Sunday over Ethiopia's controversial mega-dam that has long stoked tensions in the Nile River basin, one day after Egypt and Sudan said they were optimistic a deal could be reached.

The three countries' foreign and water ministers were set to participate in a call organised by South Africa, which as the current chair of the African Union has taken the lead on the most recent negotiations. The call began at 04:00 pm East African time (13:00 GMT), according to a tweet from Seleshi Bekele, Ethiopia's water minister.

The Grand Ethiopian Renaissance Dam (GERD), situated in western Ethiopia on the Blue Nile River, has been contentious ever since Ethiopia broke ground on the project in 2011.

Egypt and Sudan view it as a threat to vital water supplies, while Ethiopia considers it crucial for its electrification and development.

Multiple rounds of talks have failed to yield a breakthrough on how the dam will be managed and operated.

Nevertheless Ethiopia announced in June that it had reached its first-year target for filling the dam's massive reservoir, a move that sparked anxiety in Cairo and Khartoum.

The South Africa-led talks were suspended earlier this month after Addis Ababa insisted on linking them to renegotiating a deal on sharing the waters of the Blue Nile.

It was not clear Sunday whether that issue had been addressed. Meeting in Khartoum on Saturday, the prime ministers of Sudan and Egypt said they were optimistic that the talks would ultimately bear fruit. "It is important to reach an agreement that guarantees the rights and interests of all three nations," the leaders said in a joint statement, adding that a "mechanism to resolve (future) disputes" should be part of any deal.