Three people were killed when shells hit the capital of Sudan's South Kordofan state on Friday, state television said, in a suspected rebel bombardment as President Omar al-Bashir visited Juba.
The attack in the east end of Kadugli town came at about 1:30 pm (1030 GMT), residents said.
"Two shells hit an open area and three struck houses which burned to the ground. Two people were killed and eight injured," said one resident, who witnessed the attack across from his own home.
The state broadcaster gave a toll of three dead and said others were wounded and taken to hospital.
Residents believed the shells were fired by the Sudan People's Liberation Movement-North (SPLM-N), but the rebels' spokesman said he did not yet have any information.
The shells crashed down as Bashir held talks in the South Sudanese capital Juba with his counterpart Salva Kiir in a symbol of easing tensions, particularly over the South's alleged support for SPLM-N.
"There was shelling for 45 minutes," another resident said. "People got panicked."
A third resident said he saw clouds of smoke rising after four explosions. The shelling came from the same direction which rebels admitted firing from in attacks late last year, he said.
In October the SPLM-N began several weeks of periodic mortar attacks on Kadugli, forcing residents to flee.
Eighteen people died and 32 were wounded in those barrages, the UN children's fund said.
The rebels said at the time they were targeting military facilities in response to government air raids on civilian property.
On Friday the SPLM-N accused the government of bombing four villages around Kadugli a day earlier, injuring a woman.
The rebels' previous bombardment of Kadugli began after Sudan and South Sudan reached a series of security and economic agreements which they hailed as easing tensions after fighting along their disputed border earlier last year.
Under those pacts the two sides were to set up a demilitarised border buffer zone to cut cross-border rebel support.
But the deals were not implemented as Khartoum pushed for guarantees that Sudan would no longer back the SPLM-N.
A breakthrough came at talks in Addis Ababa last month, when Sudan and South Sudan finally settled on detailed timetables to implement the measures including the buffer zone, which they have now started to set up.
A diplomatic source said earlier that Khartoum apparently hoped the agreements would weaken the rebels, who remained a "potential spoiler" of the deals.
The government had long rejected negotiations with the SPLM-N but on April 1 Bashir said his administration seeks a broad political dialogue, "including (with) those who are armed".
He also announced amnesty for all political prisoners, although only 11 are known to have been released, none from the SPLM-N.
The rebels have said they are ready to talk on the basis of a UN resolution passed last year, but the government wants to use a different framework.
The war in South Kordofan, and a similar conflict in Blue Nile state, has forced more than 200,000 people to become refugees in South Sudan and Ethiopia.
An estimated one million more have been affected inside Blue Nile and South Kordofan where, a senior UN aid official has said, people were surviving on "roots and leaves".
The SPLM-N says it is fighting to remove the Arab-dominated regime to ensure greater democracy, respect for ethnic diversity and human rights.
South Sudan armed and trained the SPLM-N when it was part of the South's rebel force but says it cut military ties before the South's independence in July 2011, under a peace deal that ended a 22-year civil war.
Analysts and diplomats say there is no doubt South Sudan continued to back the rebels.