(Updates death toll)
* Gunfight between soldiers and ex-rebel commander's guards
* Four killed, thousands flee to U.N. peacekeeping base
* South Sudan awash with weapons after decades of war
By Hereward Holland
JUBA, Jan 28 (Reuters) - A gunfight between South Sudanese soldiers and a former rebel commander's guards killed four people in a small eastern town, destroyed buildings there and forced thousands to flee, witnesses and officials said on Monday.
Symptomatic of the disorder that has plagued some parts of the south since it split from Sudan after decades of civil war, the fighting on Sunday in Jonglei state's Pibor broke out between soldiers on patrol and bodyguards of James Kuberin.
Such outbreaks are stymying efforts to exploit oil reserves in the new nation and subverting government efforts to build up state institutions and assert control over an impoverished country the size of France that is awash with weapons.
One soldier, two civilians and a former rebel were killed in the gunfight and Kuberin fled with his guards, army spokesman Philip Aguer said. He declined to say whether the army had fired on unarmed civilians.
Kuberin was commander of a group led by David Yau Yau, one of several militias fighting the army because of alleged abuses during a disarmament programme and corruption in the Juba government. Kuberin defected to the army in December.
Witnesses said Kuberin went to Pibor's market for a haircut and was told by an army patrol not to walk around with armed guards.
Witness Peter Gazulu said one soldier had a hand grenade.
"Somebody tried to take it and they wrestled with it and it exploded. The guy died. Then the other men opened fire on the bodyguards and they escaped," he told Reuters by telephone.
"The army fired all over the place and burned half of Pibor town, particularly in the south. They were firing at civilians," he said. "In a house the father of my friend was burned alive. The body is still there." Several people were hurt, he said.
About two thousand people fled to a U.N. peacekeeping base, U.N. spokesman Kouider Zerrouk said.
Medical group Medecins Sans Frontieres, one of few charities operating in Jonglei, said it had treated four people for gunshot wounds.
South Sudan's civil war with Sudan ended with a 2005 peace deal which paved the way for secession. Rebel and inter-ethnic violence is hindering government plans to explore a vast oil concession block with the help of French firm Total.
In Jonglei, there has been a cycle of revenge killings between the Murle and Lou Nuer tribes, often provoked by cattle raids. More than 1,500 people have been killed in the clashes since South Sudan's independence, the United Nations says.
Human rights groups accuse the army of serious abuses against civilians, including simulated drownings and rape, during a disarmament process aimed at ending the violence.
South Sudan accuses Sudan of supplying Yau Yau's rebels with weapons, an allegation denied by Khartoum. (Editing by Louise Ireland)