The United Nations demanded that Khartoum withdraw its troops from Sudan's Abyei district after what the south branded an "invasion" by northern troops of the flashpoint border region.
A visiting delegation of the UN Security Council said on Sunday they were "very, very concerned about the rapidly deteriorating situation in Abyei" and formally called on Khartoum to withdraw its troops.
"The members of the Security Council call upon the government of Sudan to halt its military operation and to withdraw immediately from Abyei town and its environs," the French ambassador to the United Nations, Gerard Araud, told a joint news conference in Khartoum with his Russian and US counterparts.
UN chief Ban Ki-moon urged both sides to pull out of Abyei.
"The secretary-general calls on both parties to immediately cease their military operations, withdraw all forces and armed elements from Abyei and desist from further acts of antagonism," said a statement from his office.
US Senator John Kerry said late Sunday that Sudan stands "ominously close to the precipice of war" and called on "both sides to reduce tensions."
Kerry, chairman of the influential Foreign Relations Committee, said the African nation faces a "test of leadership."
"At this very moment, Sudan stands ominously close to the precipice of war," he said in a statement. "Both sides must put an end to the recent provocations and quickly get back on course before the situation deteriorates any further."
Kerry called for the withdrawal of "all unauthorized forces out of Abyei," strengthening the UN peacekeeping forces in Abyei, and statements from both sides "to reduce tensions, assume responsibility, and pledge a renewed commitment to the peace process."
The European Union joined the growing chorus of condemnation over the seizure as a threat to peace between Sudan's north and south in the run-up to international recognition of the south's independence in July.
"I condemn the violent incidents in Abyei during the last few days," EU foreign policy chief Catherine Ashton said, pointing out that it violated the 2005 Comprehensive Peace Agreement (CPA) signed between the two sides to end the civil war.
"I therefore appeal to all parties to resolve their differences in the framework of the CPA," the statement added.
EU foreign ministers would be considering the crisis at their scheduled meeting in Brussels on Monday, she added.
Abyei was granted special status under the CPA that ended 22 years of devastating civil war between north and south, and it requires both sides to keep their troops out until a vote on its future.
"We are in control of Abyei and all the (Bahr al-Arab) area north of the bank of the river," Khartoum's minister of state for the presidency, Amin Hassan Omer, told a news conference in Khartoum.
"This is because there are still elements from SPLA (the south’s Sudan People’s Liberation Army) trying to enforce its presence in Abyei, and this is not acceptable according to the Abyei protocol and the CPA."
South Sudan's government dismissed the allegation as an "absolute lie" and warned the north's "illegal occupation" of Abyei risked tipping the country back to a conflict that would threaten the lives of thousands.
"This is an illegal invasion and breaks all the peace agreements, endangering the lives of thousands of civilians," said south Sudan's information minister Barnaba Marial Benjamin.
"This event is a long-term plan of the government of Khartoum," he said, accusing the northern troops of "burning houses on a rampage of looting," as he appealed for UN peacekeepers to "come out of their bunkers."
"Women and children are suffering at the hands of an invading army that doesn’t care," he said. "They are hungry, in need of medication and out in the heavy rains without shelter."
SPLA spokesman Philip Aguer said earlier: "People have fled the area, because the bombardment was indiscriminate -- bombs from the air and from tanks on the ground."
Troops loyal to the SPLA had all retreated into the south from the disputed district on the border with the north, he added.
Britain on Sunday joined the United States and the EU in condemning the north's move into the contested district.
"I condemn recent military actions in and around Abyei, including the attack on Abyei town by the Sudanese armed forces on 21 May and the attack on a joint Sudanese armed forces and UN convoy on 19 May," said Foreign Secretary William Hague.
Fighting came to a halt later Sunday, a joint UN-AU peacekeeping force said.
"This morning there was still some ground fighting and gunfire exchanged but it appears calm returned in the afternoon," said Kouider Zerrouk.
Aid agency Medecins sans Frontieres, which runs health clinics in Abyei town and 40 kilometres (25 miles) to the south in Agok, said in a statement the "entire population of Abyei town fled the city."
Its clinic in Agok had received 42 wounded people by Saturday evening.
Fighting in Abyei has pitted the former civil war enemies against each other since January when the district was due to vote on its future alongside a referendum on independence for the south which delivered a landslide for secession.
But the plebiscite was postponed indefinitely as the north and south disagreed on who should be eligible to vote in an area where conflicted loyalties and land disputes keep tensions high.
The UN Security Council delegation met Sunday with representatives of the government in Khartoum but neither Foreign Minister Ali Karti, who was expected to lead discussions, nor Vice President Ali Osman Taha was present.© ANP/AFP