* U.S. threatened U.N. sanctions if Kiir does not sign

* Conflict erupted in December 2013 after power struggle

By Denis Dumo

JUBA, Aug 25 (Reuters) - South Sudan's president is expected to sign a peace deal on Wednesday to end a 20-month-old conflict but will list his reservations in an annex to the pact, his foreign minister said on Tuesday.

President Salva Kiir delayed signing the deal in the Ethiopian capital last week saying he needed more time for consultations. This prompted U.S. threats of U.N. sanctions if he did not meet a two-week deadline to agree.

Rebel leader Riek Machar, Kiir's former deputy until he was sacked in 2013, has already signed the peace deal that was brokered by the regional African grouping IGAD.

The conflict, which has exposed deep ethnic divisions, erupted after a power struggle between Kiir, a Dinka, and Machar, a Nuer.

Fighting has killed thousands of people, driven more than two million from their homes and halted development in the grindingly poor nation that seceded from Sudan in 2011.

Kiir was expected to sign the deal when regional African heads of state visited Juba on Wednesday, Foreign Minister Barnaba Marial Benjamin told Reuters by telephone in South Sudan's capital.

"But there will be an annex on reservations in some areas that have not been adequately discussed and agreed," he said, without elaborating on what the reservations were.

"WITHOUT CONDITIONALITIES"

Mediation officials and diplomats previously indicated Kiir's concerns included proposals for Juba to be a demilitarised zone and a demand he consult his first vice president on decisions. Machar is expected to take that post.

Machar's concerns had also included aspects of power sharing arrangements, particularly in oil-producing states.

The presidents of Kenya and Uganda, and the prime minister of Ethiopia, who have been involved in peace talks, would be among those expected to visit Juba on Wednesday, Benjamin said.

A Kenyan official confirmed President Uhuru Kenyatta would attend the Juba summit on Wednesday, but did not give details.

In Addis Ababa, an IGAD mediation official told Reuters Kiir had informed the mediation team he would sign on Wednesday.

"The proposal stands as it was. There is no change in its provisions. He will sign it without conditionalities," the official said.

The United States has proposed a U.N. arms embargo and more targeted sanctions from Sept. 6 unless the pact was signed by the 15-day deadline given to Kiir last week. (Additional reporting by Edmund Blair in Nairobi and Aaron Maasho in Addis Ababa; Writing by Edmund Blair; Editing by Raissa Kasolowsky)