South Sudanese officials say government troops are fighting rebels in the flashpoint town of Bor. The rebel fighters are believed to be loyal to former Vice President Riek Machar.
Officials said fighting broke out in the city of Bor, 190 km (120 miles) to the north of the capital, Juba, late on Monday.
"We are fighting the rebels now," the mayor of Bor, Nhial Majak Nhial, told Reuters news agency by phone on Sunday, with bursts of gunfire audible in the background.
Bor, the capital of the eastern state of Jonglei, has been the site of a power struggle over the past two weeks, having been captured by rebels before being retaken by government troops a week ago.
It was not clear if the rebels attacking the city are the "White Army" militia that has been advancing on the city over the past few days. The "White Army" is composed of ethnic Nuer fighters loyal former Vice President Riek Machar, who has come out in opposition to President Salva Kiir of the ethnic Dinka group.
The rivalry between the two men has fanned ethnic differences in the country, with open violence erupting on December 15 when Kiir blamed his former deputy for mounting a coup.
Thousands are feared dead, with fierce fighting reported from strategic oil-producing areas.
Tens of thousands displaced
The United Nations said thousands of people have fled Bor ahead of the rebel advance. The city has a history of ethnic conflict, with an estimated 2,000 killed in a massacre in 1991 that was blamed on the Nuer.
The aid group Doctors Without Borders has warned of "catastrophic" conditions for the refugees, with clean water, food and shelter all in short supply as a reported 70,000 people from Bor arrived in Awerial in the neighboring state of Lakes.
Ugandan President Yoweri Museveni has said Machar would face punitive measures from regional nations if he did not comply with a Tuesday deadline for negotiations on a peace deal to begin.
"If he doesn't, we shall have to go for him, all of us," he said on Monday, referring to the regional bloc known as IGAD that set the deadline.
The United Nations said on Monday that violence in South Sudan since mid-December has displaced up to 180,000 people.
South Sudan became the world's youngest nation after achieving independence from its northern neighbor, Sudan, in July 2011.
(Reuters, AP, AFP)