The assault, which followed a week of skirmishes sparked by a local dispute, has raised fears for a 2005 north-south peace deal that ended two decades of civil war. The United Nations said it hoped to chair a meeting of northern and southern generals late Wednesday to negotiate a joint withdrawal from the town and a formal ceasefire.

‘There will hopefully be a meeting of the Ceasefire Joint Military Committee,’ said UN spokesman Khaled Mansour, referring to a high-level body made up of military leaders from both sides. The United Nations says up to 60,000 people fled the fighting in Abyei – at the centre of a region claimed by both the northern Sudanese government and South Sudan.

More than three years after both sides signed the 2005 Comprehensive Peace Agreement, they have not agreed on borders or a local government for the Abyei region. At stake is control of energy revenues and pipelines from oil fields around Abyei. An international analyst, who asked not to be named, said the nearby Heglig oil fields, run by Chinese-led consortium Greater Nile Petroleum Operating Company, produced about 250,000 barrels a day, roughly half of Sudan’s entire output.

The U.N. Mission in Sudan said fighting between the SPLA came close to the gate of its main compound in the town on Tuesday. Aid workers said at least 100 people had been injured in the latest fighting. At least 200 children were separated from their parents as panic set in, Hilde Johnson, UNICEF Deputy Executive Director told reporters. By Wednesday only three families had been reunited, she added, quoting figures from charity Save the Children.

Fighting petered out in the afternoon and there had been a tense calm ever since, said aid workers. ‘Twenty-one Sudan Armed Forces soldiers were killed and 54 were injured,’ said armed forces spokesman Brigadier Uthman al-Agbash.

Luka Biong Deng, south Sudan’s minister for presidential affairs, told Reuters he was still waiting for details of the number of southern casualties. He dismissed claims that the SPLA had started the fighting as ‘unfounded’, saying that the clashes has been started by a north Sudanese army captain last week. Deng did not go into further details. But diplomatic sources said the north-south confrontation is believed to have started when a northern soldier was shot dead at a checkpoint in the area on May 13. [YOU ARE WRONG]

Clashes erupted there last week between Sudan’s Arab-dominated army and the Sudan People’s Liberation Army [(SPLA)], an ethnic African militia — making Abyei a flashpoint that could wreck the fragile peace. The civil war left an estimated 2 million people dead. The U.N. says between 30,000 and 50,000 people have been displaced by the recent fighting. SPLA officials say the town’s market and only bank were burned, and the town has been virtually deserted. The number of casualties are difficult to determine because of the continued violence.

Sudanese troops resumed shelling Abyei on Tuesday, U.N. and southern officials said. Army spokesman Brig. General Osman al-Aghbash said SPLA forces attacked an army camp with heavy weapons including tanks and rockets, “with the intention of taking over the town”. Al-Aghbash told the state-run Sudan News Agency that members of the army were killed in the attack, but did not give a number.

A U.N. official said a stray mortar round and small arms fire hit the group’s compound in Abyei, but there were no casualties. “(The U.N. compound) was not targeted. The fighting was close,” said Kouider Zerrouk, a U.N. spokesman in Khartoum. “There are no casualties.”

Sudan’s 2005 peace agreement created a unity government led by President Omar al-Bashir and his one-time military rival, First Vice President Salva Kiir. It also set up a semi-autonomous southern government led by Kiir, and called for national elections in 2009 and a referendum on independence for South Sudan in 2011. The Sudanese People’s Liberation Movement [SPLM], which Kiir heads, has accused al-Bashir of breaching the 2005 accord by refusing to share oil wealth, failing to pull government troops out of South Sudan, and remilitarizing contested border zones such as Abyei.

Tension has occasionally flared in Abyei, which is claimed by the southerners, but the northern government is reluctant to let go because of its oil fields. A fragile cease-fire was reached on Thursday and consultations continued to ease the tension. SPLA released two members from the northern ruling party it had captured during the fighting, and the two sides agreed to pull troops from the contested town. According to the 2005 agreement, only joint military units from both sides are allowed to be deployed in Abyei, until its administrative fate is to be determined in a 2011 referendum.

U.N. aid organizations on Monday began distributing food and water and reuniting children separated from their families because of the fighting. Zerrouk said aid distribution outside of Abyei continued despite the fighting.

UN Secretary General Ban Ki-moon deplored the fighting between the Sudanese military and troops with the Sudan People’s Liberation Army. The SPLA fought a rebellion against the government for more than 20 years until both sides signed a peace deal in 2005.

The deal’s Comprehensive Peace Agreement ended a north-south civil war that killed about 2 million people and displaced more than 4 million others.

An impasse over the boundaries of the town of Abyei is a major reason the peace agreement has not been fully implemented.

Fighting erupted in Abyei on May 13. It resumed Tuesday despite a cease-fire and has “resulted in the destruction” of the town “and the displacement of between 30,000 and 50,000 people,” the secretary general said in a statement.

“If the situation is not urgently addressed, the achievements thus far of the Comprehensive Peace Agreement could be placed at serious risk,” he said.

The civil war in Sudan, which started in 1983, pitted a northern government dominated by Arab Muslims against black Christians and animists in southern Sudan.

That conflict was not directly related to ongoing violence in the Darfur region of western Sudan.

Human rights groups and United Nations say the Sudanese military armed and trained Arab militias in Darfur after a rebellion erupted in 2003. They say the military and militias have engaged in widespread killing, rape and forced displacements in Darfur as they battle about rebels who have splintered into roughly a dozen groups.

One of those groups staged a daring attack this month near the Sudanese capital, Khartoum. The government said it quashed the attack.