Addis Ababa - Sudan's armed forces have clashed with rebels and seized an area close to the disputed border with South Sudan, a state-linked news website said, fuelling uncertainty over the final stage of peace talks between the former civil war adversaries.
The African Union is trying to hammer out a border security agreement between Sudan and South Sudan which would allow the resumption of oil exports crucial to both nations' economies.
A deal is needed by the weekend to avert sanctions from the UN Security Council.
The African neighbours came close to war in April in the worst outbreak of violence since South Sudan seceded from Sudan in July 2011 under a peace deal that ended decades of civil war.
Diplomats said there has been progress after two weeks of talks but no breakthrough yet on setting up a demilitarized buffer zone at the unmarked border, much of which is disputed.
Sudan accuses South Sudan of supporting rebels of the Sudan People's Liberation Movement-North (SPLM-North) which has been fighting the army in South Kordofan and nearby Blue Nile state for more than a year. Both states border South Sudan.
Sudan's armed forces seized the area of Sarkam in south western Blue Nile on Wednesday, killing and wounding a large number of rebels, army spokesman al-Sawarmi Khalid told the state-linked Sudanese Media Center (SMC) late on Wednesday.
"After the operation the armed forces started securing the area and cleansed it on a large scale," said Khalid, adding that some soldiers were wounded during the fighting.
SPLM-North spokesperson Arnu Lodi could not confirm the fighting.
"I need to check first with the troops on the ground," he told Reuters.
South Sudan officials could not immediately be reached for comment.
Western and African diplomats hope to wrap up talks in Ethiopia at the weekend with a summit between Sudan's President Omar Hassan al-Bashir and his southern counterpart Salva Kiir.
Bashir has agreed to go to Addis Ababa on Sunday but officials in the southern delegation say Kiir's attendance will be only confirmed if there is a breakthrough at the security talks.
Leaders of the SPLM-North are also negotiating with Sudan in non-direct talks in Ethiopia over a political solution in South Kordofan and Blue Nile but diplomats see no real progress.
The SPLM-North is part of an alliance with three rebel groups from Sudan's western Darfur region which wants to topple Bashir.
The United Nations, African Union and Arab League brokered a deal between Sudan and the SPLM-North last month to allow much-needed aid into rebel-held areas in both states. Fighting has displaced more than 600 000 people in both states.
But the agreement has not been implemented yet as Sudan and the UN have been unable to agree on how to deliver aid.