By Ulf Laessing
KHARTOUM (Reuters) - Armed looters set fire to parts of Sudan's disputed Abyei border town on Monday, the United Nations said, days after north Sudanese troops seized it, pushing the north and south closer to conflict.
Sudanese President Omar Hassan al-Bashir said the north wanted a peaceful solution but the army stayed put in all the territory it took, defying demands from the U.N. Security Council and drawing sharp criticism from the United States.
South Sudan accused Khartoum of trying to provoke war and prevent the oil-rich south from becoming an independent country after it voted to break away from the north in a January referendum agreed under a 2005 peace deal.
Analysts fear north-south fighting over Abyei could reignite a full blown conflict in Africa's largest country, a move that could have a devastating impact on the surrounding region.
Both Sudan's mostly Muslim north and the south, where most follow Christian and traditional beliefs, claim the fertile, oil-producing Abyei border region. Ownership was not settled in the peace deal that ended decades of civil war.
Abyei remains the most contentious point in the build-up to the secession of the south, due to take place on July 9.
The northern army sent tanks into Abyei on Saturday, the United Nations said, after weeks of growing tension and accusations of skirmishes by both sides. Thousands of people fled, leaving Abyei town empty, while food supplies have also been disrupted, the aid group Medecins Sans Frontieres said.
A U.N. official said fighting seemed to be over in Abyei town, but staff at a peacekeeping base could hear occasional gunshots. The U.N. Mission (UNMIS) "strongly condemns the burning and looting currently being perpetrated by armed elements in Abyei town," said U.N. spokesman Kouider Zerrouk.
U.N. Security Council envoys, who earlier demanded the north withdraw, met the southern government in the southern capital Juba on Monday.
The United States will find it hard to drop Sudan from the U.S. list of state sponsors of terrorism if the north continues to occupy Abyei, the U.S. special envoy to Sudan, Princeton Lyman, said on Monday.
Sudan, which once hosted the late al Qaeda leader Osama bin Laden, has been on the list since 1993.
Even China, a major oil trading partner of the north, expressed disquiet after the escalation in Abyei.
"China expresses concern about the clashes that have recently happened in Sudan's Abyei region," Foreign Ministry spokeswoman Jiang Yu said in a statement, hoping both sides would solve the issue through dialogue.
BASHIR WANTS PEACEFUL SOLUTION
Bashir said north Sudan was working to achieve a peaceful solution for the disputed Abyei region but he offered nothing concrete how to end the stalemate.
"We're are trying to solve the remaining issues and remove tensions in Abyei and go ahead with a peaceful solution for Abyei," he told a regional summit attended by leaders from neighbors Chad and the Central African Republic.
Defense Minister Abdel Rahim Mohamed Hussein had earlier told parliament Abyei would stay with the north until a much-delayed referendum was held.
North Sudan says it sent in troops to clear out southern soldiers who it said had broken agreements by entering the area.
But the south, where 75 percent of the country's 500,000 barrels a day oil production comes from, said Khartoum was trying to provoke a war. "What Khartoum is trying to do now is not just occupy Abyei, they want us not to get to 9th of July," said Anne Itto, deputy secretary general of the ruling Sudan People's Liberation Movement (SPLM).
"What they want is for us to react and drag the whole of Sudan to war, but we will not give them that joy of taking us back to war," she said in London.
Around 100 southerners protested in Juba against the northern military action in Abyei, holding up banners that described it as an invasion, witnesses said.
"It is hopefully not the beginning of a wider conflict but it has the potential for it," said analyst Roger Middleton from London's Chatham House. "Abyei is important to north and south. There is oil, grazing land and emotional reasons. Many leaders in the SPLM (the south's ruling party) come from Abyei."
Southerners overwhelmingly voted to declare independence from the north in a January referendum. The 2005 peace deal also promised Abyei residents their own referendum over whether to join the north or south, but that never took place as neither side could agree on who was qualified to vote.
The last civil war killed an estimated 2 million people and forced around 4 million to flee, many of them to countries neighboring Sudan.
Analysts say there is a risk the Abyei fighting could spread to other parts of Sudan, particularly the surrounding region of South Kordifan, also hit by north-south tension.
(Additional reporting by Emma Batha in London, Khalid Abdelaziz in Khartoum and Ben Blanchard in Beijing; editing by Mark Heinrich)