Sudanese President Omar al-Bashir (pictured) threatened to overthrow South Sudan's "insect" government on Wednesday, as world powers called on the rivals to avoid an all-out war after the South seized a key oil field last week.

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REUTERS - Sudanese President Omar Hassan al-Bashir vowed on Wednesday to “liberate” South Sudan from its ruling party, a sharp escalation of rhetoric after fierce border clashes that edged the African neighbours closer to all-out war.

There has been growing alarm over the worst violence seen since South Sudan split away from Sudan as an independent country in July under the terms of a 2005 peace settlement. Global powers have urged the two sides to end the fighting.

South Sudan seized the contested oil-producing Heglig region last week, prompting Sudan’s parliament to brand its former civil war foe an “enemy” on Monday and to call for a swift recapture of the flat savanna region.

In a fiery speech to members of the ruling National Congress Party (NCP) singing military songs, Bashir repeatedly referred to the South’s ruling Sudan People’s Liberation Movement (SPLM) as “insects”, a play on their Arabic name.

“Our main goal is liberation of the southern citizens from the SPLM,” Bashir said. “This is our responsibility before the Southern people.”

Sudan and South Sudan separated officially on July 9, 2011, but tensions between the two countries have not subsided, especially over the issue of shared oil revenues and defining the border. Most of the oil fields of the old unified Sudan are now in the South, which says that Khartoum is asking for too big a share in the proceeds. In January, the south cut off oil supplies to Khartoum, putting economic pressure on the north, while at the same time depriving itself of valuable revenues.

He went on to predict “good news” from Heglig within a few hours, but also suggested tensions would not end until the South’s ruling party collapsed. He did not specify how that might happen.

“The story began in Heglig, but it will end in Khartoum or Juba,” Bashir said.

Shortly after the speech, South Sudan’s army (SPLA) spokesman said the South’s forces had repulsed “a very big attack” on Heglig, which is known as Panthou in the south. There was no immediate comment on this from Sudan or independent confirmation of the claim.

Earlier on Wednesday, Sudan and South Sudan accused one another of launching attacks on a new front. South Sudan’s army said a total of 22 soldiers died in the fighting.

Both countries are economically dependent on oil. Any protracted fighting would severely hit their economies.

‘An explosive situation’

Distrust runs deep between the neighbours, who are at loggerheads over the position of their border, how much the landlocked South should pay to transport its oil through Sudan and the division of national debt, among other issues.

South Sudan says Heglig is its rightful territory and has said it will only withdraw if the United Nations deploys a neutral force there.

In Juba, around 1,000 South Sudanese gathered at a rally, chanting: “Down with Bashir”. They also criticised U.N. Secretary General Ban Ki-moon after the U.N. Security Council had called on South Sudan to pull out from Heglig.

“Down with Ban Ki-moon!” Alfred Lado Gore, environment minister and a senior SPLM official, told the cheering crowd. “We managed to win our independence and we will win Heglig and (the disputed region of) Abyei.”

Russia, a permanent U.N. Security Council member, called on South Sudan to withdraw immediately to defuse “an explosive situation” in Heglig.

Sudan said it had repulsed an attack on Tuesday by South Sudan’s armed forces near the Bahr al-Arab river, known as the Kiir River in the south.

“Limited forces from the SPLA carried out an attack on the area to divert the efforts of the armed forces working to liberate the Heglig region,” the state-linked Sudanese Media Centre quoted a local military official as saying.

The report said the fighting took place 62 km (39 miles) south of Mairem which, maps show, is on the boundary between the Sudanese regions of South Kordofan and Darfur, the scene of a separate insurgency against the Khartoum government.

South Sudan’s military spokesman, Philip Aguer, confirmed the clashes took place but said the SPLA had not tried to enter Sudan’s territory. The fighting broke out after southern troops were shelled while trying to collect water, he said.

“They reacted, and fighting erupted between them,” Aguer said. “Our forces crossed the river, crossed the bridge briefly, but the command recalled them back.”

He said 15 Sudanese soldiers and seven SPLA troops were killed, figures impossible to verify independently.

In a sign rebel groups in Sudan might be trying to take advantage of the tensions, insurgents based in Darfur said late on Tuesday they had destroyed a Sudanese military base and taken control of a town.

The reports from a faction of the Sudan Liberation Army (SLA) loyal to Minni Minnawi could not be independently verified, and Sudan’s army spokesman was not immediately available to comment.

In Khartoum, Sudanese foreign ministry official Omer Mohamed told reporters Sudan would continue to press diplomatic as well as military efforts to recover Heglig. “We have to end the occupation by hook or crook, by either way.”

The 15-nation U.N. Security Council on Tuesday reiterated its call for Sudan to stop air strikes and South Sudan to withdraw from Heglig. It also discussed imposing sanctions on the countries if they did not stop the clashes.

Sudan said sanctions should only be directed against South Sudan, who it accuses of violating its sovereignty.

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