By Aaron Maasho and Hereward Holland
ADDIS ABABA/JUBA, July 21 (Reuters) - South Sudan accused Sudan on Saturday of bombing its territory along a disputed borderland and suspended direct talks with its neighbour over oil and security issues, but Khartoum denied the charge.
The two countries split peacefully last year under a 2005 agreement that ended decades of civil war. But many issues remain unsolved, and the two old foes came close to all-out war in April after border clashes escalated.
South Sudanese military spokesman Philip Aguer said Sudanese war planes had bombed the village area of Rumaker in the Northern Bahr al Ghazal border state on Friday morning.
"Two people were slightly injured," he said. "The bombing happened at 3:25 a.m. when people were still sleeping."
South Sudan said it would suspend direct talks scheduled for Sunday in Addis Ababa. The negotiations, which started last week, raised hopes of a negotiated solution to end hostilities.
"We have suspended the direct, bilateral talks because of the bombings by Khartoum," said Atif Kiir, spokesman of South Sudan's negotiations team.
He said that any further talks in the Ethiopian capital would take place only under the auspices of an African Union (AU) panel and would not be direct. "We won't attend direct talks while they bomb our territory," he said.
Sudan denied bombing its southern neighbour, saying it had targeted rebels inside its own territory. It said the rebels of the Justice and Equality Movement (JEM) had crossed the border from the South and entered Darfur, in Western Sudan.
The group is part of a rebel alliance that wants to topple Sudanese President Omar Hassan al-Bashir and which Khartoum says is being supported by South Sudan. Juba denies this.
"The Sudanese army forces dealt with them inside the Sudanese territory," the state news agency SUNA quoted an official at Sudan's Addis Ababa delegation as saying. "The South Sudanese territory did not get violated."
SUNA said Sudan was ready to continue direct talks.
Bashir met his southern counterpart, Salva Kiir, last week on the sidelines of an AU summit, their first meeting since border fighting worsened in April. [ID: nL6E8IE37Y]
The long-time rivals have broken off several rounds of negotiations over differences on where to draw a demilitarized buffer zone along the disputed border as a first step to end hostilities.
The neighbours face the threat of sanctions from the U.N. Security Council unless they peacefully resolve border, oil and other security disputes by a deadline of Aug. 2.
The Security Council has already expressed concern over delays in the negotiating process..
The two countries accuse each other of supporting rebels on their respective territories and argue over how much landlocked South Sudan should pay to export oil using pipelines and other infrastructure in the North.
The South shut off its oil production in January, instantly erasing 98 percent of state revenues, as part of the dispute.
Southern claims of attacks are hard to verify due to a lack of access to the remote border zone although Reuters reporters have witnessed several bombings on southern territory. (Reporting by Aaron Masho, Hereward Holland and Ulf Laessing; Editing by Alessandra Rizzo)