South Sudan battles rage in key oil town: army

South Sudan's military battled rebels in the streets of the key northern oil town of Malakal on Wednesday, the army said, as conflict in the world's newest nation entered its second month.

The battle for Malakal, the main town in Upper Nile state, is now turning into one of the most bitter in the conflict, with the United Nations reporting tank battles in the streets.

"There is heavy fighting in Malakal," army spokesperson Philip Aguer said, dismissing rebel claims they had taken control of the town.

Rebel forces staged a fresh attack on Tuesday to seize the town, which has already changed hands twice since the conflict began, with rebel spokesperson Lul Ruai Kong, boasting the insurgents had "recaptured Malakal".

"This is not over yet," Aguer said. "The fighting is ongoing."

South Sudan has been gripped by violence since 15 December, when clashes broke out between army units loyal to South Sudanese President Salva Kiir and those supporting ex-vice president Riek Machar.

According to the United Nations, about 400 000 civilians have fled their homes over the past month, many of them to escape a wave of ethnic violence between members of Kiir's Dinka people, the country's largest group, and Machar's Nuer community.

Up to 10 000 people are believed to have been killed in the fighting, aid sources and analysts say, including over 200 civilians who drowned in a boat fleeing the latest round of fighting in Malakal.

The East African regional bloc IGAD has been brokering peace talks in neighbouring Ethiopia, although with still little sign of a hoped-for ceasefire agreement.

Late Tuesday, Minister of Information Michael Makuei spoke optimistically that the two sides may soon "agree on the cessation of hostilities", but the rebel delegation said the key sticking point was still the release of political leaders arrested in Juba.

Signing a ceasefire and the release of the prisoners are "hooked together", rebel delegate Hussein Mar Nyout said, adding that a truce would only be signed at the same time as a deal on the prisoners.

The army is also trying to recapture the town of Bor from the rebels, the capital of restive Jonglei state.

Aguer, in a statement he has repeated for over a week, said that the army was "still marching on Bor".

"Frontlines there have so far been quiet this morning, but clashes can break out at any time," he said.