The rebels seized the town of Bentiu last week, unleashing two days of ethnic slaughter as they hunted down civilians sheltering in mosques, churches and a hospital, according to the UN.
Bentiu is the capital of the key oil-producing state of Unity. Government forces say they have been forced to pull out of another major settlement nearby amid furious rebel attacks.
“The battles have been very heavy in Unity state,” army spokesman Philip Aguer told AFP, adding that troops made a “tactical withdrawal” from the town of Mayom, a strategic local centre made up of dusty roads and thatch huts, some 50 kilometres (30 miles) west of Bentiu.
South Sudan’s army has been fighting rebels loyal to sacked vice president Riek Machar since the unrest broke out more than four months ago.
The conflict has an ethnic dimension, pitting President Salva Kiir’s Dinka tribe against militia forces from Machar’s Nuer people.
“Fighting is ongoing, we are close by and will not let the rebels advance further,” Aguer added, insisting that the army remained in control of major oil fields and the country’s refinery, also in Unity state.