South Sudan's President Salva Kiir has said he would return to a system of 10 states from 32, a major opposition demand, paving the way for a unity government and an end to the country's ruinous civil war.

"The compromise we have made today is a painful decision but a necessary one if that is what brings peace", Kiir said in a statement on Saturday. "I expect the opposition to be prepared to do the same."

Disagreement between Kiir and former rebel leader Riek Machar over the number of states, a contentious issue because the borders will determine the divisions of power in the country, as well as a failure to integrate different fighting forces have been major obstacles to completing the peace process.

When it gained independence from Sudan in 2011, South Sudan had 10 states, as set out in its constitution. In 2015, Kiir increased that to 28 and then later to 32.

Kiir had repeatedly refused to back down on the number of states but has come under intense international pressure to compromise. Machar previously said he could not return to his previous vice president position if the status quo on states remained.

The president on Saturday said the country would now be divided among the original 10 states, plus three "administrative areas" of Pibor, Ruweng and Abyei.

The opposition welcomed the move but also raised questions over the fate of Ruweng, a key oil-producing zone.

"In general we welcome the decision taken by the president to take the country to 10 states," said Manawa Peter, Machar's deputy spokesman, before adding: "This is a win-win decision for the people and we commend the president for his wise choice."

Beny Mabor, a political analyst based in South Sudan's capital, Juba, told Al Jazeera: "The peace move by President Salva Kiir is yet another long overdue decision in the interest of peace, unity and to foster reconciliation for the destroyed social fabric," Mabor said.

International pressure by the United States and others has been building on Kiir and Machar to meet a February 22 deadline to again join forces in a transitional government.

The two rivals agreed on a peace deal in 2018, pressured by the United Nations, the US and countries in the region.

Under the deal, they agreed to form a unity government in May 2019 but missed the deadline amid disputes over territory and security arrangements.

A second deadline of November last year was also missed and pushed back by 100 days, prompting Washington to recall its ambassador and impose sanctions on senior officials for their role in perpetuating the conflict.

South Sudan's five-year civil war, which erupted just two years following independence from Sudan, killed nearly 400,000 people and displaced millions.

The economy was shattered and nearly half the country remains in a severe hunger crisis.