South Sudan's army said it had lost control of the flashpoint town of Bor on Wednesday, after clashes were reported there with fighters loyal to the country's former vice president Riek Machar.
Fighting that erupted in the capital Juba late on Sunday spread on Wednesday to Bor, north of the capital and scene of an ethnic massacre in 1991, witnesses said, raising fears of a slide into civil war.
"We (are) not in control of Bor town," SPLA (southern army) spokesman Philip Aguer told Reuters without giving more details.
Earlier, an official in Bor, north of Juba, said soldiers attacked each other at two military barracks and one journalist said troops loyal to Vice President Riek Machar now controlled them, suggesting violence was increasingly running along ethnic lines.
Soldiers in the capital Juba have clashed since Sunday, killing up to 500 people, in what President Salva Kiir said was an attempted coup launched by Machar's supporters.
According to the online journal Sudan Tribune, Machar denied any role in the fighting or any coup attempt.
Juba was calm after sporadic overnight gunfire but fighting was also reported to have flared in Torit, east of Juba, adding fresh instability to an already volatile region of Africa.
"The worry is that once this conflict spreads out of Juba to other areas it is in (a) much more ethnic landscape, and then you have the remobilisation of the old militias," said one Western diplomat who has long dealt with South Sudan.
The president sacked Machar in July and political tensions have simmered since then in the oil producing nation, which relies on crude exports via a pipeline through Sudan. Till now, fighting had appeared to stay away from the oilfields.
The government said it had arrested 10 people, including seven former ministers, over the "foiled coup" and wanted to question several others, including Machar.
In Bor, where Nuer soldiers loyal to Machar in 1991 massacred hundreds of Dinka, the president's ethnic group, the locals feared the fighting could spill beyond the barracks.
A broader conflict could threaten vital aid and be exploited by neighbouring Sudan, which has had persistent rows with Juba over their undefined borders, oil and security. That would further hurt efforts to build a functioning state in the south.
"Last night there was fighting in two military barracks," Hussein Maar, deputy governor of Jonglei state, told Reuters, although he said the town of Bor was calm.
A journalist in Bor told Reuters by telephone that troops led by commander Peter Gadet, a Machar ally, took control of bases that were abandoned by outnumbered Dinka soldiers.
But details were sketchy, and, according to another account, only one base was in the hands of Machar's allies.
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U.N. Secretary-General Ban Ki-moon on Wednesday said the violence in South Sudan that has claimed hundreds of lives in recent days could be spreading to other parts of Africa's youngest country.
"This is a political crisis and urgently needs to be dealt with through political dialogue," he told reporters. "There is a risk of this violence spreading to other states (in South Sudan) as we have already seen some signs of this."
This as, South Sudanese President Salva Kiir said he was ready for any dialogue with the former vice president whom he accused of being behind a coup attempt, Kiir's spokesman said.
"He was asked whether he would accept any dialogue, and he said he is ready for dialogue," presidential spokesman Ateny Wek Ateny told Reuters by telephone.
Kiir, who had been responding to questions at a news conference, said there were no current talks with former Vice President Riek Machar, who he sacked in July. The two men are from rival ethnic groups that have clashed in the past.
REUTERS