South Sudan's army retook a strategic oil town Tuesday after a rebel incursion sent thousands fleeing and imperiled crude output in sub-Saharan Africa's third-largest oil producer. "By 4 p.m. the rebels were fleeing Malakal," said South Sudan's military spokesman, Col. Philip Aguer. The fighting around Malakal, which began on Saturday and continued through Tuesday, caused civilians to abandon their homes and some to join rebel forces, according to Col. Aguer. "They were agitated to come and attack Malakal and take whatever property they can as an incentive," he said.
Complicating Malakal's defense, soldiers at a base outside the town in recent days have defected to join the rebels loyal to former Vice President Riek Machar in their fight against the government led by South Sudan's President Salva Kiir. Fighting has raged since a political dispute between Messrs. Machar and Kiir last month sparked a conflict between army factions loyal to each man. The chaos claimed lives beyond the battlefield. More than 200 people drowned Sunday when a boat they were using to flee capsized in the White Nile River, according to Col. Aguer.
The United Nations says the number of civilians seeking shelter at its base in Malakal doubled on Tuesday to 20,000. Dozens of people inside the camp were hospitalized after being hit by stray bullets from heavy machine-gun fire and tanks on the battlefield nearby, said Martin Nesirky, spokesman for U.N. Secretary-General Ban Ki-moon. The latest fighting drew government troops to battle defectors. Malakal is the capital of the oil-rich Upper Nile state, which produces about 200,000 barrels a day. It is the only place still producing crude after fighting prompted workers to flee wells in a second state, called Unity.
South Sudan is sub-Saharan Africa's third-largest oil producer after Nigeria and Angola, and the industry provides nearly all of the country's budget revenue and foreign exchange.
Finance Minister Aggrey Tisa Sabuni said Saturday that oil output was already down more than 20% across the country. The lost output would likely force South Sudan to seek loans to cover the country's budget this year, he said, on top of the $1.6 billion the country borrowed from oil companies and banks in 2013.
Rebels also briefly held Malakal last month before being repelled by the government's troops. A representative for the rebels who is helping negotiate a possible peace deal with Mr. Kiir's government in Ethiopia didn't respond to calls and text messages seeking comment. Thousands of people have been killed and half a million have fled their homes, the U.N. says.
International mediators have met with Messrs. Kiir and Machar in the last few days to try to broker a cease-fire. But Mr. Machar has refused to talk until 11 political supporters detained last month are freed. Despite international pressure Mr. Kiir has refused to release them because, he says, they are suspected of participating in a coup to overthrow him and their case needs to go through the legal system.
The rebels deny the accusations, saying the detainees are being held because they are supporters of Mr. Machar. Ateny Wek Ateny, Mr. Kiir's spokesman, said the government hadn't received a proposal from mediators that might end the deadlock. On Tuesday, Nkosazana Dlamini-Zuma, chairwoman of the pancontinental African Union's executive arm, urged the two sides to "immediately cease hostilities, in the interest of the whole nation," a statement from her office said.
South Sudan's neighbor, Uganda, has been wading deeper into the conflict. The Ugandan Parliament voted Tuesday to support a government motion endorsing the deployment of Ugandan troops in South Sudan to evacuate stranded Ugandans and to help stabilize Mr. Kiir's government.
While Uganda has had its military in the country since December, parliamentary approval means that Uganda can now "augment its presence for as long as it takes," said Defense Minister Crispus Kiyonga.
South Sudan's conflict erupted last month when a running political feud between Messrs. Kiir and Machar sparked a shootout at a military base in the capital. Soldiers from Mr. Kiir's ethnic Dinka group allegedly attacked civilians from Mr. Machar's ethnic Nuer tribe, sending thousands fleeing to a United Nations base near Juba's airport. Nuer rebels have since attacked Dinka civilians as they sought to take territory in the country's rural north.
Fighting also continued Tuesday outside Bor, the last major town in rebel hands, about 130 miles north of Juba. Mr. Aguer said that army soldiers had been caught in several ambushes as they approached the town from the south, indicating that Mr. Machar's forces can still strike beyond the city's limits.