Sudanese President Omar al-Bashir said Monday there will be no more talks with South Sudan, as fresh Sudanese air raids dashed South Sudanese hopes for an end to weeks of fighting.
"No negotiation with those people," Bashir said of the South Sudanese regime, which he earlier described as an "insect" that must be eliminated.
"Our talks with them were with guns and bullets," he told soldiers in the main oil region of Heglig, which the South occupied for 10 days.
On Friday, Bashir and Defence Minister Abdelrahim Mohammed Hussein -- both wanted by the International Criminal Court for alleged war crimes in Sudan's Darfur region -- declared the army had forced Southern soldiers out of Heglig.
South Sudanese President Salva Kiir had already announced that his forces would leave under "an orderly withdrawal". His army said the pullout was completed on Sunday.
Despite the end of the occupation, the governor of South Sudan's Unity State, Taban Deng, said Sudanese bombs fell on a key bridge and a market, killing at least two children in the state capital Bentiu on Monday.
The bombs prompted heavy bursts of gunfire from Southern soldiers hoping to shoot down Khartoum's warplanes, said an AFP correspondent who was 50 metres (yards) from where the ordnance hit.
In the market, stalls were on fire and large plumes of grey smoke rose high into the air, as screaming civilians ran in panic.
"They have been given orders to wipe us out, they have called us insects," Deng said, referring to Bashir's earlier speech.
"We have been pressured by the international community to pull out of Heglig and this is the consequence, we have brought the war to home," Deng added.
There was no immediate comment from Khartoum but a foreign ministry statement on the "liberation of Heglig" said Sudan "stresses that the government of Sudan has not, and does not intend to attack the Republic of South Sudan".
The continued fighting sparked anger in Bentiu.
"I'm fearing that even if we give them Heglig, there will still be a war," said shopkeeper Suleiman Ibrahim Ali. "I'm not alone -- everyone is fearing the Antonov (warplanes)."
The South's deputy director of military intelligence, Mac Paul, said: "I think it is a clear provocation."
The attack is the latest of several along the disputed border.
The international community had called for an end to Sudan's cross-border raids, as well as to the South's presence in Heglig.
Southern officials said Sudanese troops had pushed across the contested border on Sunday before being repulsed after heavy fighting, although it was impossible to verify exactly where the clashes took place.
Southern troops were digging into positions fearing renewed ground attacks by Sudan, said the South's Lieutenant General Obuto Mamur.
Kamal Marouf, a Sudanese army commander, claimed in Heglig Monday that more than 1,000 South Sudan troops were killed in the clashes.
"The numbers of killed from SPLM are 1,200," Marouf said in an address to thousands of his soldiers as a stench of death filled the air.
The toll is impossible to verify but an AFP correspondent who accompanied Marouf said the putrid bodies of dead South Sudanese soldiers lay beneath trees which are scattered about the area.
Sudan has not said how many of its own soldiers died in the operation.
The main oil processing facility in Heglig -- providing about half of Sudan's crude -- was heavily damaged, an AFP correspondent reported.
A storage tank was destroyed by fire, eight generators which provided power to the facility were also burned, and some oil was leaking onto the ground at the plant operated by Greater Nile Petroleum Operating Company (GNPOC).
Both sides have accused each other of damaging the oil infrastructure.
The violence in Heglig was the worst since South Sudan won independence in July after a 1983-2005 civil war in which an estimated two million people died.
The South pulled out from Heglig after international pressure, but is calling on Khartoum to withdraw its troops from the contested Abyei region, which it seized last May.
Tensions have mounted over the border and other unresolved issues, raising concerns in recent weeks about the possibility of a wider war.
After the Heglig occupation, US President Barack Obama, UN chief Ban Ki-moon and the African Union urged Sudan and South Sudan to resume talks.