Sudan's President Omar al-Bashir who also attended the festivities, made a speech where he called for the Obama administration to remove Sudan from the State Sponsor of Terrorism list, which carries its own sanction designations.
Throughout the peace process leading to independence, the United States has held out removal as a significant carrot to Khartoum as a reward for cooperation in fully implementing the 2005 agreement.
Rice has said, however that until all of the peace agreement issues are resolved Sudan will remain on the list. Those issues include citizenship laws, oil revenue sharing and determining the final status of Abyei.
Bashir, meanwhile is under his own political pressure.
Earlier this week he reportedly gave a fiery speech at a political rally where he warned that even though Sudan will be "welcoming" of its new southern neighbor, there will be no negotiation on additional rights in South Kordofan and the Nuba mountains, another border area belonging to the north but with strong southern ties.
He also said there is little room left for negotiation on Darfur, the region he has been charged with committing genocide and war crimes in by the International Criminal Court.
The speech is seen by analysts as a show of strength by Bashir, who is being blamed by hard-liners as well as some moderates in Sudan for allowing one-third of the country which holds nearly all the oil reserves, to leave.
"This split provides an opportunity to make sure the borders between North and South are delineated 'appropriately' as according to Bashir," said Tjossem, who predicts it is something that will continue to fester for the next few years. The North will continue to support groups from the south and vice versa, so today is euphoric and historic but there is likely to continue to be issues on the border for years to come.
But on this day the people of South Sudan are choosing to concentrate on the opportunities in front of them, not the challenges.
"Life's been difficult because of the war and having to live with these people [from the north] for all this time," he says. "Now we have our own government and a system that is in place. Let us now have our own country with which our rights will be respected and which we will be responsible for."