Sudan's disputed border town of Abyei is ablaze, with gunmen looting properties days after troops from the government in Khartoum entered the area, UN peacekeepers say.
The peacekeepers belonging to UNMIS, the UN mission in Sudan, said on Monday that the burning and looting was perpetrated "by armed elements" but it was not clear whether they were from the north or the south.
Omar-al-Bashir, the Sudanese president, said a "peaceful resolution" for Abyei would be found.
"We are efforting to solve the remaining issues and remove tensions in Abyei," he said in a speech.
The developments in Abyei drew strong reaction from the US, with its special envoy to the country saying Washington would rule out dropping Sudan from a terrorism list if it continued occupying the oil-rich district.
Princeton Lyman, the envoy, said the "occupation" of Abyei by northern troops was "an extremely disproportionate response by the government of Sudan" to an attack on a UN convoy escorting the troops last week.
But Lyman added that there was still hope of the two sides resolving the crisis.
"I am optimistic in this sense: These two entities - Sudan and soon-to-be independent South Sudan - need each other," he told Al Jazeera.
"They have to collaborate for their own good, and while we're now facing a major crisis in Abyei, we're hopeful that the leadership, particularly president al-Bashir [in the north] and vice-president Kiir [in the south] will re-establish the spirit that they talked about ... "
Sudanese government officials in the north said their troops moved into Abyei - inhabited by two tribes backed by the south and north respectively - to drive the Sudan People's Liberation Army (SPLA) out, who they said had been occupying Abyei since last December.
The SPLA is the armed force of South Sudan, which held a referendum for independence in January and is due to become an independent state in July.
"As we talk now, there's a very large level of looting and killing," Luka Biong, minister of cabinet affairs, said from Juba.
People in the UN compound have been "slaughtered," he said.
"The most important thing is for [Bashir] to withdraw the Sudan armed forces from the area."
UNMIS strongly condemned the burning and looting in Abyei and called upon the government of Sudan to "urgently ensure that the Sudan Armed Forces fulfil their responsibility and intervene to stop these criminal acts".
Hua Jiang, the chief public information officer for UNMIS, said the burning of property and looting had continued on Monday.
She said Sudanese troops from the north had prevented peacekeepers from conducting their daily, routine patrol.
"So we're not able to get out of the compound right now to carry out our duty," she told Al Jazeera from Juba, the capital of South Sudan.
Thousands of civilians are reported to have fled southwards since northern troops and tanks took control of the town on Saturday.
South Sudan also claims Abyei district, which has special status under a 2005 peace deal that ended 22 years of south-north civil war, and has called the occupation "illegal".
Barnaba Benjamin, the minister of information in South Sudan, told Al Jazeera that north Sudanese troops had "illegally and unconstitutionally invaded Abyei".
"What the Sudanese forces are doing now [is] they are looting the place; they are burning the place," he said.
"They have made thousands of people - children, women and the elderly - a humanitarian disaster. This is what they have been doing. They didn't find any SPLA troops in Abyei.
"Their claim that there are SPLA troops in Abyei is not true ... They entered the town without any confrontation ... So why are they there?
"Why are they bombing the civilian targets; the villages around? They are airlifting Misseriya Arab tribes into the territory to occupy the areas of Dinka Ng'ok."
The nomadic Misseriya tribe, which is backed by the north, grazes its cattle in Abyei. The Dinka Ng'ok tribe, backed by the south, lives in Abyei year round.
A senior official from the ruling National Congress Party in Khartoum, the capital of the north, denied reports of looting, but called Abyei "a war zone".
"They [troops] are not looting the place," Didiry Mohammad Ahmed told Al Jazeera.
"We know that this place, right now, is a war zone. The army is struggling very hard to see to it that no looting happens, but nonetheless some isolated incidents had happened.
"We are doing our very best right now - working in tandem with the UN mission in the region - to ensure no looting takes place. Nothing can be traced back to our forces."