JUBA: South Sudan's military battled rebels in the streets of the key northern oil town of Malakal Wednesday, the army said, as conflict in the world's newest nation entered its second month.
Little progress has so far been made in ceasefire talks in neighbouring Ethiopia, where leaders have spent time squabbling over the venue but are deadlocked over rebel demands for the release of political prisoners.
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.
Some of the 20,000 civilians sheltering in the peacekeeper's compound had been wounded from stray bullets from heavy machine guns during the intense battle.
"There is heavy fighting," army spokesman Philip Aguer told AFP, dismissing rebel claims they had taken control of the town.
Rebel forces staged a fresh attack Tuesday to seize the town, which has already changed hands twice since the conflict began, with rebel spokesman Lul Ruai Kong, boasting the insurgents had recaptured Malakal.
"This is not over yet," Aguer said, saying the rebels were liars. "The fighting is ongoing."
South Sudan has been gripped by violence since December 15, 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, as the violence spiralled into ethnic killings 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.
UN leader Ban Ki-moon on Tuesday condemned both the army and rebels for stealing food and humanitarian supplies, warning he was alarmed at the "rising number of fatalities" in the fighting.
The UN World Food Programme has said that at least 10 percent of its food in the stores have been looted, enough to feed some 180,000 people for a month.
Over four million people, or roughly a third of the population, were deemed to be "food insecure" by WFP even before fighting began.
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 told AFP, adding that a truce would only be signed at the same time as a deal on the prisoners.
China's ambassador to the African Union Xie Xiaoyan repeated Beijing's demands for an end to the fighting.
"We want an immediate cessation of hostilities... only through dialogue and negotiation can we ever hope to settle the dispute and help the country get back to normal," he told reporters in Addis Ababa on Wednesday.
Beijing has invested heavily in the country's oil sector and buys most of its crude output.
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".
Regional nations have also been dragged in, with former civil war foes Sudan offering support to secure oil fields, and neighbour Uganda sending in troops to back Kiir.
Uganda's parliament on Tuesday endorsed the decision to send in troops, with Defence Minister Crispus Kiyonga claiming the soldiers had helped avert "genocide."
More than 78,000 South Sudanese have fled to neighbouring nations since fighting began in mid-December, according to the UN refugee agency, the majority of them crowded into camps in northern Uganda.
Over 225,000 refugees mainly from Sudan are also struggling in the country with many aid agencies having evacuated their staff amid the fighting.