S. Sudan government, rebels set to talk

A young displaced girl carries a bucket of water back to her makeshift shelter at a United Nations compound which has become home to thousands of people displaced by the recent fighting, in the Jebel area on the outskirts of Juba, South Sudan Tuesday, Dec 31, 2013. [Photo/icpress.cn]

JUBA/ADDIS ABABA - South Sudan's government and rebels were set to start New Year's Day peace talks in Ethiopia's capital, Addis Ababa, to thrash out details of a ceasefire to end more than two weeks of ethnic bloodletting in the world's newest state, mediators said.

Delegations from both sides would arrive later on Wednesday, said regional bloc IGAD, as South Sudan's government acknowledged it had lost the key town of Bor in the latest clash with militias loyal to former Vice President Riek Machar.

Government troops had made a "tactical retreat" to barracks 3 km (2 miles) away on Tuesday, said Nhial Majak Nhial, mayor of Bor, the capital of Jonglei state, which has untapped oil reserves and was the site of an ethnic massacre in 1991.

"I'm worried that the continued fighting in Bor might scupper the start of these talks," said Ethiopian Foreign Minister Tedros Adhanom, who is chairman of the East African bloc the Intergovernmental Authority on Development (IGAD) that is mediating.

IGAD said both sides would name teams of negotiators to agree on ways to roll out and monitor the ceasefire, in a bid to end the fighting that has killed at least 1,000, unsettled oil markets and raised fears of a civil war in a fragile region.

"We don't want to expose the people of South Sudan to a senseless war," South Sudan's Foreign Minister Barnaba Marial Benjamin said on a government Twitter feed on Wednesday.

The government and rebels agreed to start talks under mounting pressure from regional and Western powers.

Washington, the United Nations and South Sudan's neighbours played a central roll in negotiations that ended decades of civil war with Sudan to the north and led to the secession of South Sudan in 2011, and have been scrambling to stem the latest violence.

South Sudan holds the third-largest oil reserves in sub-Saharan Africa after Angola and Nigeria, according to BP, but remains one of the continent's least developed countries.