"The SAF have entered (the town) Abyei, there is still fighting but they have come with tanks, they are shooting and shooting," said SPLA spokesman Philip Aguer.
"Our police have been fighting but the SAF have sent many soldiers in," he added, speaking by phone from Juba, the capital of southern Sudan.
Officials with the UN Mission in Sudan (UNMIS) and a diplomatic source with a UN Security Council delegation visiting the Sudanese capital Khartoum confirmed the news to AFP.
"The SAF have taken the town, it is a major development," the diplomatic source, who did not want to be named, said.
"Elements of the SPLA have pulled back to the south and are no longer in the town, where about 10 T-55 SAF tanks are patrolling," said one UNMIS official.
The news came just hours after the United Nations called for an "immediate cessation of hostilities" in the contested border region and as the south's army accused the north of bombing raids.
Earlier Saturday, the UN Security Council delegation began a tour of three African states to assess peace and security threats, with a special focus on Abyei.
"We strongly encourage all parties to resume dialogue towards reaching a lasting political settlement," an UNMIS statement said, expressing concern at reports of shelling and bombing there.
Raft of issues
Abyei's future is the most sensitive of a raft of issues that the two sides in Sudan are struggling to agree on before the south is recognised as an independent state in July.
News of the Sudanese army breakthrough came after Aguer had reported an increase in the fighting there and accused the SAF of having staged bombing raids there during the three days of fighting.
Southern police had been fighting back the SAF all day, he reported.
"There have been bombing raids, and ground attacks," he said.
Shooting broke out late Thursday as UN peacekeepers escorted 200 northern SAF troops out of the contested area, with both armies accusing each other of having started the fight.
Fighting in Abyei has pitted former civil war enemies against each other since January when it was due to vote on its future alongside a referendum on the south's secession.
But the plebiscite was postponed indefinitely as the north and south disagreed on who should be eligible to vote in an area where conflicted loyalties and land disputes keep tensions high.
UN wants civilians protected
The UN urged all parties to "protect civilians" and called for "withdrawal of all unauthorized forces" from the area, in line with earlier agreements.
The UN Security Council on Saturday began its five-day tour in Ethiopia and is due to visit Sudan's capital Khartoum, the southern capital Juba, and then head on to Kenya.
Fighting in several southern areas has alarmed the UN.
It warned that civilians were being targeted in "heightened violence" between south's army and a rebel militia in the oil-rich Unity state.
Rebels led by former southern army general Peter Gadet have been fighting the southern army in intermittent clashes since April that have left over 100 dead and forced thousands to flee.
Land mines and heavy weapons are being used against civilians, the UN said.
Renewed fighting broke out on Friday in Unity's Mayom area, leaving "several casualties," according to both rebels and southern officials.
Mayom is near key oil-pumping areas critical to Sudan's economy and close to the disputed north-south border and Abyei.
Fighting also spread to parts of neighbouring Warrap state, where the UN reported "serious violations of basic human rights."
Spike in violence
The spike in violence comes as the south gears up for full independence in less than two months time, after almost 99 percent voted in a January referendum to separate from the north.
There are least seven different militia groups across the south fighting the government, which is also struggling to contain heavily armed cattle raiders, who fight regularly.
Over 1,000 people have died in violence and more than 100,000 forced from their homes across the south this year, according to UN and official figures.
