Sudan and South Sudan edged more closely to all-out war on Wednesday than at any time since the South seceded last year, amid border clashes and calls by both sides to mobilise.
The African Union said it was "deeply alarmed" by the worsening violence between the former civil war foes, but its efforts to mediate were set back when a furious Sudan pulled out of AU-led talks.
UN leader Ban Ki-moon urged South Sudan President Salva Kiir to meet with his rival from the north to head off all-out war as the US State Department urged both sides to end "all hostilities".
Amid heavy artillery bombardments and airstrikes in the battle zone, Sudan called the South's seizure of the contested oil-producing Heglig region the worst violation of its territory yet.
The African Union in a statement expressed "grave concern at the escalating armed conflict on the border between Sudan and South Sudan and calls upon both parties to exercise utmost restraint".
It noted "with alarm the occupation of Heglig by the armed forces of the Republic of South Sudan" and called for their "immediate and unconditional withdrawal".
Southern army spokesman Philip Aguer said late Wednesday, the second day of fighting, that the battles were continuing, and that his troops had "passed Heglig," without elaborating.
Khartoum's Undersecretary of Foreign Affairs Rahma Mohammed Osman claimed the Southern soldiers had pushed 70 kilometres (45 miles) into Sudan.
Parliaments in Juba and Khartoum called on citizens to prepare for war.
"Khartoum might be meaning a real war... If you don't defend yourself, you will be finished, so you should go and mobilise the people on (the) ground to be ready," South Sudanese Speaker James Wani Igga told parliament.
"It's an ugly development at the border. We have to be vigilant to all the points as they are attacking us in all corners," added Igga, also deputy chairman of the South's ruling party, to loud applause by lawmakers.
Sudan's parliament called for a "mobilisation and alert" of the population, and halted AU-led talks with Juba over their protracted dispute over oil, border demarcation, contested areas and citizenship issues.
Sudanese President Omar al-Bashir had already issued a decree forming a high-level committee for mobilisation on March 26, the same day a series of border clashes began, sparking international fears of full blown war.
The committee was tasked with preparing training camps for the paramilitary People's Defence Force, a pro-Khartoum militia which carried out some of the worst attacks during Sudan's 1983-2005 civil war.
The clashes follow border fighting that erupted last month between the neighbours. Each side has blamed the other for starting the hostilities.
On Tuesday, an AFP correspondent on the South Sudanese frontline heard heavy artillery shelling and multiple air strikes for around an hour, with one bomb dropped by aircraft less than a kilometre away.
On Wednesday, the hospital in Bentiu, capital of the South's Unity state, was full of wounded soldiers from the frontline, about 60 kilometres (40 miles) away.
Major South Sudanese troop movements were seen close to the frontier, with convoys heading up to the frontline near Heglig, an area Juba claims but which makes up a key part of Khartoum's oil production.
International concerns have risen at the risk of war, and South Sudan's neighbour Uganda called for a return to dialogue, with fears that conflict would have a devastating impact on the wider region.
"We don't believe that this violence will solve anything," said Ugandan regional affairs minister Asuman Kiyingi, adding that Kampala was working to bring the rivals back to the negotiation table.
The UN secretary general spoke with US Secretary of State Hillary Clinton and Ethiopia's Prime Minister Meles Zenawi on ways to halt the collision course, said his spokesman Martin Nesirky.
The UN leader told Kiir that "before undertaking a discussion on the causes of the escalation, the immediate priority is to de-escalate the situation to avoid any further bloodshed," Nesirky told reporters.
Khartoum has vowed to react with "all means" against a three-pronged attack it said South Sudanese forces had launched against Sudan's South Kordofan state, including the Heglig oil field.
A statement on Khartoum's official SUNA news agency warned of "destruction" in South Sudan. Khartoum also claimed Southern forces were backed by rebel groups in Sudan, an allegation rejected by the fighters.
Hundreds of thousands of citizens of each nation living in the territory of the other country are also facing uncertain futures after a deadline requiring them to formalise their status expired at the weekend.
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