South Sudanese rebels loyal to former Vice President Riek Machar have recaptured the key town of Bor, the capital of restive Jonglei state, the town's Mayor said.

Nhial Majak Nhial said on Wednesday government troops loyal to President Salva Kiir had made a "tactical withdrawal" to Malual Chaat army barracks, 3km south of the town on Tuesday, after fighting that started at dawn.

"Yes they (rebels) have taken Bor," Nhial, said from the national capital Juba, 190km south of Bor by road.

Western and regional powers have pushed both sides to end the fighting that has killed at least 1,000 people, cut South Sudan's oil output and raised fears of an ethnic-based civil war.

Information Minister Michael Makuei said on Monday Machar wanted to seize Bor so he could "talk from a position of strength" at peace talks, which were expected to start in neighbouring Ethiopia on Wednesday.

Government officials said their troops had been battling the ethnic Nuer "White Army" militia and forces loyal to Peter Gadet, a former army commander who also rebelled against President Salva Kiir when the fighting broke out in the national capital Juba on December 15.

The clashes quickly spread, dividing the country along the ethnic lines of Machar's Nuer group and Kiir's Dinkas.

Humanitarian organisations say tens of thousands of Bor civilians have crossed the White Nile river to escape the fighting and fled to the swamps.

Source: Reuters