Bashir Rejects Talks as Sudan Bombs S. Sudan Town.

SUDAN: Sudanese President Omar al-Bashir said on Monday there will be no more talks with South Sudan, as fresh Sudanese air raids drew swift condemnation from the United States and France.

"No negotiation with those people, Bashir said of the South Sudanese regime, which he earlier described as an "insect" that must be eliminated.

"Our talks with them were with guns and bullets," he told soldiers in the main oil region of Heglig, which the South occupied for 10 days. 

On Friday, Bashir and Defence Minister Abdelrahim Mohammed Hussein -- both wanted by the International Criminal 

Court for alleged war crimes in Sudan's Darfur region -- declared the army had forced Southern soldiers out of Heglig.

South Sudan said it completed the pullout on Sunday, in response to appeals from world leaders and to allow a resumption of dialogue.

Despite that, the governor of South Sudan's Unity State, Taban Deng, said Sudanese bombs fell on a key bridge and a market, killing at least two children in the state capital of Bentiu on Monday.

 An AFP correspondent was 50 metres (yards) from where the ordnance hit.

In the market, stalls were on fire and large plumes of grey smoke rose high into the air, as screaming civilians ran in panic.

The raid dashed South Sudanese hopes for an end to weeks of fighting.

"I'm fearing that even if we give them Heglig, there will still be a war," said shopkeeper Suleiman Ibrahim Ali. "I'm not alone -- everyone is fearing the Antonov (warplanes)."

Sudan denied the attack but the United States condemned it and urged an "immediate" halt to hostilities and a return to talks, the State Department said.

France's foreign affairs spokesman Bernard Valero said the "aggression" was unacceptable and ran the risk of worsening the situation.

War Torn Situation in South Sudan.

US President Barack Obama said the presidents of Sudan and South Sudan "must have the courage to negotiate" because their people deserve peace.

"We have been pressured by the international community to pull out of Heglig and this is the consequence, we have brought the war to home," Deng said.

A foreign ministry statement in Khartoum said Sudan "stresses that the government of Sudan has not, and does not intend to attack the Republic of South Sudan." But the South's deputy director of military intelligence, Mac Paul, said: "I think it is a clear provocation."

The air raid is the latest of several along the disputed border.

Foreign ministers of the European Union urged Sudan and South Sudan "to stop immediately attacks on each other's territory."

If violence continues the EU could sanction them, said France's Cooperation Minister Henri de Raincourt. UN chief Ban Ki-moon and the African Union have also urged Sudan and South Sudan to resume talks.

Southern officials said Sudanese troops had pushed across the contested border on Sunday before being repulsed after heavy fighting. Southern troops were digging into positions fearing renewed ground attacks by Sudan, said the South's Lieutenant General Obuto Mamur.

Kamal Marouf, a Sudanese army commander, claimed in Heglig on Monday that more than 1,000 South Sudan troops were killed in the clashes. "The numbers of killed from SPLM are 1,200," Marouf said in an address to thousands of his soldiers as the stench of death filled the air.

The toll is impossible to verify, but an AFP correspondent who accompanied Marouf said the putrid bodies of dead South Sudanese soldiers lay beneath trees in the area. Sudan has not said how many of its own soldiers died in the operation.

The main oil processing facility in Heglig -- providing about half of Sudan's crude -- was heavily damaged, the AFP correspondent reported. A storage tank was destroyed by fire, eight generators which provided power to the facility were also burned, and some oil was leaking onto the ground at the plant operated by Greater Nile Petroleum Operating Company (GNPOC).

Both sides have accused each other of damaging the oil infrastructure.

The violence in Heglig was the worst since South Sudan won independence in July after a 1983-2005 civil war in which an estimated two million people died.

Tensions have mounted over the border and other unresolved issues, raising concerns in recent weeks about the possibility of a wider war.