South Sudan has called off face-to-face peace talks with Sudan accusing its neighbour of bombing one of its villages on the border.
Colonel Philip Aguer, the military spokesman, said on Saturday that Sudanese Antonov planes bombed the village of Rumaker in Northern Bahr el Ghazal state near the two countries' border early on Friday morning.
"Two people were slightly injured," he said. "The bombing happened at 3:25am when people were still sleeping."
Disputes over oil and borders continue after South Sudan formally split from Sudan more than a year ago.
The news of the attack comes just two weeks before a UN-imposed deadline on peace and oil negotiations between the two nations, and barely a week after presidents of both countries shook hands in Ethiopia.
South said it would suspend direct talks scheduled for Sunday in Addis Ababa.
"We have suspended the direct, bilateral talks because of the bombings by Khartoum," said Atif Kiir, spokesman of South Sudan's negotiations team.
He said that any further talks in the Ethiopian capital would take place only under the auspices of an African Union panel and would not be direct.
"We won't attend direct talks while they bomb our territory," he said.
The Sudanese government in Khartoum, however, promptly rejected the accusation, saying its aircraft only attacked the Darfur rebel Justice and Equality Movement within its own borders.
Sudan's SUNA state news agency quoted government spokesman Omar Dahab as saying that Khartoum had warned Juba that the rebel forces were in South Sudan planning operations against Sudan and that the government would strike them if they "infiltrated" the country.
"The Sudanese army forces dealt with them inside the Sudanese territory," the state news agency quoted an official at Sudan's Addis Ababa delegation as saying. "The South Sudanese territory did not get violated."
The group is part of a rebel alliance that wants to topple Sudanese President Omar Hassan al-Bashir and which Khartoum says is being supported by South Sudan. Juba denies this.
Bashir met his southern counterpart, Salva Kiir, last week on the sidelines of an AU summit, their first meeting since border fighting worsened in April.
The long-time rivals have broken off several rounds of negotiations over differences on where to draw a demilitarised buffer zone along the disputed border as a first step to end hostilities.
The neighbours face the threat of sanctions from the UN Security Council unless they peacefully resolve border, oil and other security disputes by a deadline of August 2.
The Security Council has already expressed concern over delays in the negotiating process.
The two countries accuse each other of supporting rebels on their respective territories and argue over how much landlocked South Sudan should pay to export oil using pipelines and other infrastructure in the North.