South Sudanese government troops are battling for the recapture of the last remaining rebel stronghold of Bor, the army said, a day after wresting control of a key northern oil city.

"There is still fighting near Bor," South Sudan's army spokesman Philip Aguer told AFP news agency on Saturday, amid government efforts to mobilise thousands of more troops and deal a final, crushing blow to former Vice President Riek Machar and his allies.

United Nations chief Ban Ki-moon and the Security Council meanwhile urged President Salva Kiir to free political detainees loyal to rebel leader Machar, in order to kick-start stalled peace talks.

The UN leader also warned that evidence of widespread atrocities committed during the nearly month-long conflict would be investigated, and that "perpetrators of serious human rights violations will be held accountable."

The fighting has forced around a quarter of a million to flee their homes and caused "very substantially in excess" of a thousand dead, according to the UN.

The International Crisis Group, an independent think-tank, said it believed as many as 10,000 people have been killed in just four weeks of fighting in the world's youngest nation, which only won independence from Khartoum in 2011.

Machar defiant

On Friday the army marched into Bentiu, capital of the northern oil producing Unity State, although the rebels insisted it was only a "temporary setback".

Machar told AFP that his forces would fight on and defend Bor, capital of the flashpoint state of Jonglei and around 200km north of national capital Juba.

"We withdrew from Bentiu, but it was to avoid fighting in the streets and save civilian lives. We fight on, we will continue the battle," Machar told AFP by phone from an undisclosed location.

A rebel military spokesman also claimed that anti-government forces still controlled vital oil infrastructure near Bentiu. South Sudan's crude production, a key source of income for the impoverished nation, has dropped by around a fifth since the fighting began.

An AFP reporter in Minkammen, across the White Nile from Bor where tens of thousands of people have sought refuge, saw dozens of government soldiers boarding barges and heading to the frontline.