South Sudan's army said rebels had wrested control of the key oil town of Bentiu, one of the most bitterly contested regions in the four-month-long conflict.
The town, capital of oil-producing Unity state, is the first major settlement to have been retaken in a renewed offensive by forces of rebel leader Riek Machar, a former vice-president.
"We are moving forward to retake the town from the forces of Riek Machar, who entered the town on Tuesday after our forces withdrew," army spokesman Philip Aguer told AFP, accusing the rebels of "committing atrocities including the killing of civilians."
Rebels had previously seized Bentiu in December at the beginning of the conflict, but were chased out of it a month later.
"The rebels were killing innocent people as they entered, there were killings at the hospital, in the market and mosque," Aguer added, although the reports could not be independently confirmed.
UN peacekeepers were patrolling the town, the mission said, including sending armoured carriers to guard the hospital and protect patients and staff.
He had no reports of clashes on Wednesday due to communication problems, but said it "was highly likely there was fighting."
The conflict in South Sudan has left thousands dead and forced around a million people to flee their homes since fighting broke out on December 15 in the capital Juba before spreading to other states in the oil-rich nation.
UN Secretary General Ban Ki-moon warned yesterday that more than one million people were at risk of famine in the troubled country.
"We are seeing evidence of extremely high levels of malnutrition among hundreds of thousands of people displaced by the conflict, especially women and children," he stressed.
Ban called for an end to the fighting and a political resolution to the conflict.
