By Alexander Dziadosz and Ulf Laessing
KHARTOUM/JUBA (Reuters) - Sudanese warplanes bombed a disputed oil-producing border town seized by South Sudan this week, the southern state said on Saturday, in an escalation of border fighting that has edged the two countries closer to a full-blown war.
South Sudanese troops wrested control of the disputed Heglig oilfield from Sudan on Tuesday, prompting widespread condemnation from global powers and vows of retaliation from Khartoum.
The fighting has brought the former civil war foes closer to a resumption of full-blown conflict than at any time since the south seceded in July, and struck a blow to Sudan's already struggling economy.
The Sudanese army said it entered the Heglig region on Saturday and was fighting South Sudan's forces a few kilometers (miles) from the oilfield, which is vital to Sudan's economy because it produced about half of the country's 115,000 barrel-a-day crude oil output.
"We are now in Heglig region a few kilometers from Heglig town and oilfield," Sudan's military spokesman Al-Sawarmi Khalid told reporters in Khartoum, adding that fighting was continuing.
He said the Sudanese army's immediate aim was not to enter Heglig town but to destroy the South's "war machine."
But Juba - which says it will withdraw from Heglig only if the United Nations deploys forces to monitor a ceasefire - dismissed the claims as "wishful thinking" and said the South's army (SPLA) was still in control of the town.
"They are trying to convince their public they are making progress," South Sudan's military spokesman Philip Aguer said, estimating that Khartoum's forces were still at least 30 kilometers (19 miles) from Heglig town.
Limited access to the remote border region makes it difficult to independently verify claims from both sides.
Aguer said Sudan's military attacked Heglig town with military aircraft earlier on Saturday, and he accused the north of carrying out airstrikes south of the border, including a strike in Bentiu in Unity state he said killed five civilians.
"Heglig itself was bombed many times today, and the surroundings of Heglig were bombed," he said.
Khartoum denied bombing South Sudan's territory.
Both Sudan and South Sudan claim Heglig, which many southerners refer to as Panthou.
South Sudan's Information Minister Barnaba Marial Benjamin earlier said the SPLA had repulsed an attack by Sudan's armed forces late on Friday.
"They tried to attack our positions around 40 milesnorth of Heglig last night but it was contained," he said. Aguer said the SPLA destroyed two Sudanese T-72 tanks in the fighting.
Khalid, the Sudanese military spokesman, denied that claim as well, saying Khartoum's forces were much closer to Heglig.
Oil production has now stopped at Heglig, officials say.
The Sudanese pound hit a historic low on the Khartoum black market on Saturday as people fearing the economic fallout of the conflict rushed to convert savings into dollars, money traders said.
Sudan already had lost about three quarters of its oil output when South Sudan seceded, driving up the cost of imports and fuelling food inflation.
Landlocked South Sudan shut down its own output - about 350,000 barrels a day - in January after failing to agree how much it should pay to export crude via pipelines and other infrastructure in Sudan.
The crisis has all but killed hopes that the two countries will be able to reach a swift agreement on partition-related issues through African Union-brokered talks. Khartoum pulled out of the negotiations after the south seized Heglig.
Since the South voted for independence from Sudan last year, the two sides have failed to resolve issues including the position of the 1,800-km (1,200-mile) border, division of the national debt and status of citizens in each other's territory.
The two sides fought one of Africa's longest and deadliest civil conflicts. Some 2 million people died in the war, rooted in disputes over ideology, religion, ethnicity and oil.
(Additional reporting and writing by Alexander Dziadosz; Editing by Pascal Fletcher)