JUBA (AFP) -- Battles raged Friday in South Sudan, as the army said it had lost contact with forces in the key oil-town of Malakal, which both rebels and the government claim to control.

The United Nations has accused both sides of carrying out atrocities in the conflict that started on December 15 when President Salva Kiir accused his former deputy Riek Machar of plotting a coup.

The UN's Assistant Secretary-General for Human Rights, Ivan Simonovic, who visited South Sudan recently to prepare a report, has described seeing bodies that had been bound before being shot on the streets of Bentiu, in the north of the country.

He said Bentiu was now a "ghost town" after nearly all 40,000 residents fled successive raids by rival forces.

Ceasefire talks are deadlocked amid squabbling leaders and rebel demands for the release of political prisoners.

Regional nations have already been drawn into the brutal conflict, with Ugandan troops battling alongside the government.

Up to 10,000 people are believed to have been killed so far in the fighting pitting forces loyal to Kiir against a loose coalition of army defectors and ethnic militia nominally headed by Machar, a seasoned guerrilla fighter.

A confidential memo from Kenya's foreign ministry seen by AFP says that Machar has alleged Ugandan fighter jets have tried to bomb his hideout in Jonglei state.

But the government insists it is still hopeful of a deal at talks in neighbouring Ethiopia mediated by the East African regional bloc IGAD, even though Uganda is a key member and the rebels have expressed concerned about its neutrality.

"We remain confident it will not be very long until a cessation of hostilities agreement is signed," the government said in a statement late Thursday.

Fleeing back to Sudan 

However, the situation on the ground appears grim, as civilians flee the latest conflict flashpoint.

Across the border in Sudan -- which South Sudan split from less than three years ago -- thousands have fled north. Many come from the Malakal region.

"I fled from my home before sunset, and spent the night in a forest," a South Sudanese woman told AFP, alongside hundreds of crying children and exhausted adults.

According to the UN, some 468,000 civilians have fled their homes as the violence spiralled into ethnic killings between members of Kiir's Dinka people -- the country's largest group -- and the Nuer community of Machar.

Malakal, the main town in northern Upper Nile state, has become one of the most bitter battlegrounds.

On Monday, rebels staged an assault to seize back Malakal -- which has switched hands twice -- but both the government and rebels insist they are in control.

"The commander in Malakal has not been accessible since yesterday," army spokesman Philip Aguer said, without giving further details.

The United Nations is sheltering some 22,000 civilians in its cramped base in the riverside town, reporting tank battles and heavy street fighting in the hours after the rebels launched their attack.

Dozens of civilians were wounded as stray bullets landed inside the UN base, with peacekeepers firing warning gunshots to keep warring sides away.

Elsewhere, the army has for days talked of an imminent assault on rebel-held Bor, the capital of restive Jonglei state, which has already changed hands three times since fighting began.

Aguer said there had been no reports of fighting on Thursday there, but insisted the army is still "moving to Bor".

The attack on Malakal came days after the government recaptured the northern Unity state capital Bentiu last week, another vital oil town.