South Sudan government troops have lost control of the key oil-rich town of Bentiu, the capital of Unity State, to rebels amid increasing concern that the volatile situation could plunge the landlocked middle African country into an all-out ethnic civil war.

The rebels are reportedly supporters of ousted vice-president Riek Machar, who is accused of attempting a coup against the government led by President Salva Kiir.

"Bentiu is in the hands of a commander who has declared support for Machar," said the country's military spokesperson Colonel Philip Aguer. "Bentiu is not in our hands."

The impoverished African nation gets 99% of its revenue from oil and Unity State is one of the important regions with numerous oil wells.

South Sudan has been reeling under intensified violence in the past few days as rival army factions launch attacks against each other.

James Koang, the army commander of Unity State, recently defected to Machar's side. To add to the escalating crisis, another army faction has warned Koang against the defection.

The South Sudan Liberation Army (SSLA), formerly a rebel group, had issued an ultimatum to Koang to rejoin the government within three days.

"In three days, the former SSLA fighters will be in Bentiu town. Civilians and UN staff are advised to leave the town because the former SSLA forces will use heavy artillery to dislodge Maj Gen James Koang if he doesn't change his mind before the deadline given to him," the SSLA said a statement released to media.

The faction says that only the capital Bentiu is under the control of Machar and not the entire Unity State, which is claimed to be controlled by the SSLA.

"We want to inform the media that Riek Machar was lying that Unity State is under his control. Only the town Bentiu is under Major General James Koang who commanded only 600 forces. The rest of SPLA forces outside the town are not with him," the statement added.

Kiir and Dinka Tribes Could Clash

Officials have expressed concern that the situation in South Sudan could easily spill over into a bloody ethnic conflict.

Kiir belongs to the ethnic Dinka while the dismissed opposition leader Machar hails from the Nuer tribe. Dinka and Nuer are the two main ethnic groups in South Sudan.

Meanwhile, US President Barack Obama has threatened to take further action if the clashes fail to come to a halt.

"As I monitor the situation in South Sudan, I may take further action to support the security of US citizens, personnel and property, including our embassy, in South Sudan," Obama wrote in a letter to Congress leaders.

US nationals have been evacuated from the rebel-held Bor, where a US aircraft in which four American personnel were injured was shot at, to the South Sudanese capital of Juba.