South Sudan, which gained independence from Sudan in 2011, descended into chaos in December 2013 when a political row between Kiir and his deputy Riek Machar spiraled into armed conflict that reopened ethnic faultlines.
Seyoum Mesfin, the mediator for IGAD, the East African bloc leading the talks, said Kiir's side required two weeks before signing the peace deal that was accepted by the South Sudanese rebels.
"In the next 15 days, the government will come back to Addis Ababa to finalize the peace agreement," Seyoum said. No one from the government was immediately available to comment.
The U.S. State Department said it deeply regretted the government decision, urged it to sign within 15 days and renewed a threat to raise pressure on those opposing the peace proposal.
Numerous rounds of negotiations have failed to end fighting that has killed over 10,000 people and displaced more than 2 million, with both sides engaging in a war of attrition despite signing ceasefire deals.
Last month, IGAD set Aug. 17 as the deadline to end the drawn-out talks, outlining proposals for ending the fighting.
The proposal designates a 30-month transition period with Kiir as president, with a first vice president post allocated to the rebels, IGAD said.
Elections would be held two months after the close of the interim period. Both Kiir and Machar would be eligible to run.
A member of IGAD's mediation team told Reuters Kiir had reservations over the proposal's plan to demilitarize the capital, Juba, and also sought to scrap a provision that calls for consultations with Machar on "powers, functions and responsibilities" he would exercise.
Kiir's delegation has also criticized other aspects of the proposal, including an 18-month deadline for the integration of armed forces, saying this must be done in less than six months.
Machar said he was satisfied with the agreement.
"We do not have any reservations on the ceasefire. We have no reason to continue fighting," he told reporters. "There is no reason why he (Kiir) requested for more time. He has got a good agreement."
Seyoum said the government's delay did not mean it was not committed to the search for a settlement, but western diplomats urged Kiir to accept it swiftly.
"The humanitarian catastrophe in South Sudan is huge. We need the guns to fall silent," Tobias Ellwood, Britain's minister for Middle East, North Africa and Central Asia, told journalists.
RELATED STORY:
Political deal raises South Sudan peace hopes
In Washington, U.S. State Department spokesman John Kirby echoed President Barack Obama's July 27 threat to weigh putting more pressure on the parties if no deal was signed by Monday.
"We are going to work with our regional and international partners on the next steps and on ways to increase pressure, especially against those that are undermining the peace process or opposing this agreement," Kirby told reporters.
