Sudanese rebels on Sunday said they were fighting inside a strategic border town in Blue Nile state for the first time since its seizure by the army more than a year ago.
The army denied that rebels had entered Kurmuk, on the Ethiopian frontier, which is the third-largest town in Blue Nile and has been in government hands since November 2011.
The rebels' claim comes as international concern rises over tensions between Khartoum and the South Sudanese government in Juba. The two countries failed to implement agreements, including a demilitarised border zone, which they hailed in September as ending a cross-border conflict.
Khartoum accuses South Sudan, which became independent in 2011, of backing rebels of the Sudan People's Liberation Movement-North (SPLM-N) in Blue Nile and in South Kordofan state, where insurgencies erupted that year.
The South denies such support.
Access to the state is extremely restricted, making the rebels' claim almost impossible to verify.