CAIRO, May 25 (AFP) - Egypt's relations with neighbouring Sudan are improving after the return of some of the Egyptian property in Sudan which Khartoum seized seven years ago, President Hosni Mubarak told government newspapers here Tuesday. But he added that Cairo had still not gained complete satisfaction and that negotiations were continuing over the return of the premises of the Khartoum branch of Cairo University which now house Sudan's University of the Two Niles. "They have said that 30 guest houses belonging to the (Egyptian) irrigation ministry will be returned in the first phase and schools in the second phase," Mubarak told the papers. "Relations are improving with Sudan. But negotiations for the return of Cairo University branch in Khartoum are still continuing," he said. In Khartoum Sudanese Higher Education and Scientific Research Minister Ibrahim Ahmed Omar confirmed that differences remained over the return of the university premises. Last week an Egyptian delegation led by Assistant Foreign Minister Fuad Yussef took possession amid great secrecy of 18 Egyptian properties which Khartoum confiscated in 1992, the Egyptian and Sudanese media reported. The returned property included resthouses and clubs belonging to the Egyptian irrigation and defence ministries, Omar told the Khartoum daily Akhbar al-Youm Tuesday. He said the university buildings were not discussed during the delegation's visit but that Egypt had turned down three earlier Sudanese compromise proposals. Under one proposal Sudan would have intensified cultural exchanges instead of returning the buildings, Omar said. Under another it would have given an alternative site for new buildings, and under the third it would have been granted an eight-year grace period to allow students already enrolled at the University of the Two Niles to graduate before the buildings were handed back. But Egypt insisted it would give Sudan only a one-year grace period before the return of the buildings, Omar said. "This was where we reached and although we believe the right thing is to reorganise the cultural ties, we will not allow this to become an obstacle for developing relations between our two countries," he said. Relations between Egypt and Sudan have been strained since President Omar al-Beshir came to power at the head of an Islamist-backed military government in Khartoum in a 1989 military coup. Relations deteriorated further after Egypt accused Sudan of harbouring Islamic militants involved in an assassination attempt against Mubarak in Addis Ababa in 1995. Sudan repeatedly denied the Egyptian charge. On Monday the pro-government Khartoum daily Alwan reported that Egypt and Sudan were set to sign a security agreement next month in the latest sign of improving ties.  