North Sudanese forces have taken over Abyei town in the disputed border region on 21st May, in what South Sudan has called an 'act of war'.
UN diplomats were on a tour of Sudan at the time, and they called for Khartoum to 'withdraw immediately' its troops from the region.
South Sudan is due to separate from the North on 9th July 2011, after voting overwhelmingly for independence in a January referendum.
Abyei, which lies on the border of the north and the south, was due to have its own referendum on whether to join the north or south, but it was indefinitely postponed after disagreements over voter eligibility.
There have been a number of deadly clashes in Abyei in recent months, but Saturday's events appear to be the most serious.
A UN spokeswoman said some 15 tanks, belonging to the northern army had been seen in the town, and that mortars had hit a UN base, although noone was injured.
The North said it acted in self-defence, after 22 of its men were killed in a southern ambush on 19th May.
This was supported by the UN, who said the northern troops who were ambushed were being escorted out of Abyei by UN peacekeepers, and have called the incident a 'criminal attack'.
Washington said the attack was 'in direct violation' of the agreement made by the north and south to remove troops from Abyei.
South Sudan has denied responsibility for the incident.
South Sudan's army spokesman Philip Aguer said a small group of southern army troops fought four battles on 20th May, but were overpowered by the north Sudanese army. They withdrew on 21st May.
Aguer said the north had attacked the area with 5,000 troops, killing civilians and southern soldiers. The majority of the town's population had fled the town, most heading south.
UN envoys arrived in Khartoum just hours before the north took the town, and they have now cancelled their visit to the troubled region.
Gerard Araud, France's ambassador to the UN and one of the envoys, read out a statement on behalf of the UN in Khartoum. He said the Sudanese army's military operation "threatens to undermine the mutual commitment of the parties to avoid a return to war."
US ambassador to the UN, Susan Rice, said “Now [Sudan] is on a course of escalation that is quite dangerous.”
Oil-rich Abyei is one of the main unresolved issues remaining between the north and south before the latter secedes in July.
The capture of Abyei has raised fears that the two sides could return to war.
Sources: BBC News, Bloomberg, New York Times
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