* Mali had defaulted on debt due to sanctions
* Bloc accepts 24-month transition in Burkina Faso
* Gives Guinea junta until end of July for new timetable
ACCRA, July 3 (Reuters) - Leaders of the Economic Community of West African States (ECOWAS) on Sunday lifted economic and financial sanctions imposed on Mali, after its military rulers proposed a 24-month transition to democracy and published a new electoral law.
The bloc imposed stiff sanctions on Mali in January after the junta said it would not organise democratic elections the following month as initially planned.
ECOWAS Commission President Jean Claude Kassi Brou told a news conference that the sanctions will be lifted immediately. Borders with Mali will reopen and regional diplomats will return to Bamako.
"However, the heads of state decided to maintain individual sanctions, and the suspension of Mali from ECOWAS, until the return to constitutional rule," Kassi Brou said.
The individual sanctions targeted members of the ruling junta and the transitional council.
Mali has defaulted on over $300 million of its debt due to the sanctions, which cut it off from the regional financial market and the regional central bank.
The West African leaders meeting in Accra also accepted a pledge from the junta that seized power in Burkina Faso in January to restore constitutional order in 24 months.
Kassi Brou said that after a lengthy discussion with the coup leaders in Burkina Faso, a new proposal for a 24-month transition was more acceptable, after the heads of state rejected a proposed 36-month transition.
Economic and financial sanctions on Burkina Faso were also lifted, he said.
But the ECOWAS leaders rejected a three-year transition proposed by coup leaders who seized power in Guinea in September. They told Guinea's junta to propose a new timeline by the end of July or face economic sanctions.
The heads of state appointed Benin's former president Yayi Boni as a new mediator and urged the Guinea junta to work with him and quickly propose a new timetable.
"Beyond that, economic sanctions will be imposed," Kassi Brou said. (Reporting by Cooper Inveen and Christian Akorlie; Writing by Bate Felix; Editing by Kevin Liffey)