Final settlement negotiations between Sudan and South Sudan were in jeopardy Tuesday as officials in the South accused the Sudanese air force of bombing oil fields in Unity state, near the border.

Although Sudan denied carrying out any airstrikes, it confirmed that its ground forces had attacked southern artillery positions, saying they were the source of fire directed at the disputed oil-producing area of Heglig, north of the border.

The fighting that has flared since Monday marks the latest in a string of setbacks in progress toward a final settlement between the co-dependent neighbors and foes. It has come despite a nonaggression pact signed last month and ahead of a presidential summit in Juba, South Sudan’s capital, next week that had been seen as the best hope in months of achieving a viable peace. Sudan state media said Tuesday that Omar Hassan al-Bashir, the president, has canceled his trip to Juba.

Col. Philip Aguer, spokesman for the Sudan People’s Liberation Army, South Sudan’s army, said this week’s clashes were the worst since the two countries separated last year after years of civil war.

“Shells are falling even as close as 20 kilometers [about 12 miles] from Bentiu,” he said of the capital of oil-rich Unity state, adding that three SPLA battalions had pursued northern Sudanese forces as far as Heglig after clashes in disputed border territory that began Monday.

“Is this battle an open war? This is what we do not know,” said Pagan Amum, lead negotiator for the South, adding that Bashir is still welcome in Juba next week. “Now is the time to talk. It is more urgent now because of this fighting.”

The Khartoum government in the north has played down “minor clashes” between the armies, but one state official accused South Sudan of “swindle and ma­nipu­la­tion.”

Presidents Salva Kiir Mayardit and Bashir were due to meet April 3 to sign agreements on the free movement and employment of each other’s citizens and set up committees to implement the demarcation of Africa’s longest border. The two sides have also discussed a joint approach to donors to help plug the estimated $7.7 billion financing gap Khartoum faces as a result of southern secession, should the summit prove a success.

Many had hoped that the presidential meeting would also help speed a resolution over oil — produced largely in South Sudan but exported via Sudan. Mutual recrimination has led to a shutdown in oil production, totaling 350,000 barrels a day, depriving both countries of revenue.

Diplomats say African Union mediators, who this month spoke of a “spirit of cooperation and partnership,” have lost the trust of both sides.

“Just when it appeared a new oil deal — the keystone for a comprehensive agreement — might be on the horizon, the situation has again deteriorated as a result of military actions on both sides,” said Dana Wilkins at Global Witness, the campaigning group, which follows the oil talks closely.

“This deterioration will only hurt them both, undermining the little progress that had finally been made,” she said, adding that both economies are in danger of collapse.

That might even suit what one former Western diplomat familiar with the region says are “hard-liners” in Khartoum who favor a military solution over mediation. These include Abdelrahim Mohamed Hussein, the defense minister, who is one of three senior Sudanese officials who have been indicted for war crimes by the International Criminal Court, he said.

“The defense minister is the real thug and has the hard-line military support. Bashir is insecure,” said the diplomat, noting that domestic pressure had forced Bashir to cancel his trip to Juba.

Khartoum has so far refused humanitarian access to hungry border states hosting rebels, despite mediating teams that include traditional allies at the Arab League.

Sudan and South Sudan accuse each other of supporting proxy forces on either side of the border, prompting warnings from the United States and the United Nations.

“You’re dealing with militaristic autocratic regimes on both sides,” the former diplomat said.

— Financial Times