BENTIU - Sudan and South Sudan edged the closest to all-out war Wednesday since the South seceded last year, as border clashes raged and both sides called on citizens to take up defences.The AU said it was “deeply alarmed” by the worsening violence between the former civil war foes, but its efforts to mediate were set back when a furious Sudan pulled out of AU-led talks. Amid heavy artillery bombardments and airstrikes in the battle zone, Sudan called the South’s seizure of the contested oil-producing Heglig region the worst violation of its territory yet.The US State Department on Wednesday urged all sides in the armed conflict between Sudan and South Sudan to end “all hostilities” as it expressed sharp concern over the events.The State Department said it would issue a statement condemning an incursion by South Sudanese forces into Sudan’s South Kordofan state while it renewed its condemnation of Sudanese air strikes against civilian areas. “We are very concerned,” State Department spokeswoman Victoria Nuland told reporters when asked about the surge in border fighting between Sudan and the newly independent state of South Sudan.The African Union in a statement expressed “grave concern at the escalating armed conflict on the border between Sudan and South Sudan and calls upon both parties to exercise utmost restraint”. It noted “with alarm the occupation of Heglig by the armed forces of the Republic of South Sudan” and called for their “immediate and unconditional withdrawal”.Southern army spokesman Philip Aguer said late Wednesday, the second day of fighting, that the battles were continuing, and that his troops had “passed Heglig,” without elaborating.Khartoum’s Undersecretary of Foreign Affairs Rahma Mohammed Osman claimed the Southern soldiers had pushed 70 kilometres (43 miles) into Sudan.“I think this is the most serious after South Sudan’s secession and it affects our main oil production area,” he told reporters.Parliaments in Juba and Khartoum called for preparations for conflict. “Khartoum might be meaning a real war... If you don’t defend yourself, you will be finished, so you should go and mobilise the people on (the) ground to be ready,” South Sudanese Speaker James Wani Igga told parliament.“It’s an ugly development at the border. We have to be vigilant to all the points as they are attacking us in all corners,” added Igga, also deputy chairman of the South’s ruling party, to loud applause by lawmakers.Sudan’s parliament called for a “mobilisation and alert” of the population, and halted AU-led talks with Juba over their protracted dispute over oil, border demarcation, contested areas and citizenship issues.Sudanese President Omar al-Bashir had already issued a decree forming a high-level committee for mobilisation on March 26, the same day a series of border clashes began, sparking international fears of full blown war.The committee was tasked with preparing training camps for the paramilitary People’s Defence Force, a pro-Khartoum militia which carried out some of the worst attacks during Sudan’s 1983-2005 civil war.The clashes follow border fighting that erupted last month between the neighbours. Each side has blamed the other for starting the hostilities.On Tuesday, an AFP correspondent on the South Sudanese frontline heard heavy artillery shelling and multiple airstrikes for around an hour, with one bomb dropped by aircraft landing less than a kilometre away.On Wednesday, the hospital in Bentiu, capital of the South’s Unity state, was full of wounded soldiers from the frontline, about 60 kilometres (40 miles) away.Major South Sudanese troop movements were seen close to the frontier, with convoys heading up to the frontline near Heglig, an area Juba claims but which makes up a key part of Khartoum’s oil production.International concerns have risen at the risk of war, and South Sudan’s neighbour Uganda called for a return to dialogue, with fears that conflict would have a devastating impact on the wider region.“We don’t believe that this violence will solve anything,” said Ugandan regional affairs minister Asuman Kiyingi, adding that Kampala was working to bring the rivals back to the negotiation table.Khartoum has vowed to react with “all means” against a three-pronged attack it said South Sudanese forces had launched against Sudan’s South Kordofan state, including the Heglig oil field.A statement on Khartoum’s official SUNA news agency warned of “destruction” in South Sudan. Khartoum also claimed Southern forces were backed by rebel groups in Sudan, an allegation rejected by the fighters.Hundreds of thousands of citizens of each nation living in the territory of the other country are also facing uncertain futures after a deadline requiring them to formalise their status expired at the weekend.