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Heavy gunfire and explosions have been heard throughout the night in the South Sudanese capital Juba.
Local media said the fighting was between rival factions of the presidential guard and focused around their military barracks.
Army spokesman Phillip Aguer told residents to "remain in their residences until we establish the actual cause of the shootings".
South Sudan formally split from Sudan in 2011, after decades of conflict.
Numerous armed groups remain active in the oil-rich country.
Tensions have been high since President Salva Kiir dismissed his entire cabinet, including his deputy Riek Machar, in July in an apparent power struggle.
Mr Machar had indicated he planned to contest the presidential elections in 2015.UN concern
The fighting in Juba reportedly broke out overnight, and intensified in the early morning.
The South Sudan News Agency said when one unit of the presidential guard had suspected another group of incursion.
Mr Aguer said the military regretted the situation but gave no details of casualties, the Sudan Tribune reports.
The UN mission in Juba said earlier that staff there were under lockdown and that the shooting was continuous.
Hilde Johnson, the special representative in South Sudan, said the UN was "deeply concerned" about the fighting and she urged "all parties in the fighting to cease hostilities immediately and exercise restraint".
"I have been in touch regularly with the key leaders, including at the highest levels to call for calm," she said.
The UK and US embassies in Juba urged their citizens via Twitter to stay indoors and exercise caution.
The US statement to citizens said it had suspended all routine services amid "reports from multiple reliable sources of ongoing security incidents and sporadic gunfire in multiple locations across Juba".
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