JOHANNESBURG, South Africa - Fears of civil war in South Sudan grew Thursday, after South Sudan's military admitted losing control of a key town in the country's east to army mutineers.

The army lost Bor, the capital of Jonglei state, to a military faction associated with former Vice President Riek Machar, who has been accused by President Salva Kiir of launching a coup. Fighting continued in the region Thursday.

Machar denies any coup attempt, claiming that Kiir is inciting ethnic tensions.

The country appeared to be sliding dangerously toward civil war, with a major faction in the army disloyal to the president, fighting outside the capital and heightened ethnic tensions. About 20,000 civilians have fled the violence for shelter in U.N. compounds.

U.N. officials have expressed alarm that the fighting between two military factions appears to be along ethnic lines, with soldiers from Kiir's Dinka tribe on one side and others from Machar's Nuer group on the opposing side.

"Our soldiers have lost control of Bor to the force of Riek Machar late on Wednesday. There was shooting last night. We don't have information on casualties or the displaced in the town, as operations are ongoing," army spokesman Philip Aguer told AFP Thursday.

Aguer said government officials in Bor may also have defected, since none were answering their phones, the Associated Press reported.

Bor was the scene of a 1991 massacre when ethnic Nuers killed hundreds of Dinkas. The force that defected from the army in Bor was under the command of Gen. Peter Gadet Yaak, a commander of Nuer ethnicity.

Jonglei state, the country's most volatile region, has been the scene of ethnic tension between the Nuer and Murle tribes in recent years, with recurrent attacks and massacres of civilians.

Fighting began late Sunday between opposing factions in the presidential guard and spread rapidly in the capital Juba, as Kiir declared a coup had been quashed.