South Sudan's government and rebels were locked in fierce battles across the country, as a US official said peace talks were making progress. A rebel spokesman indicated there would be no imminent truce in the country unless the government frees a group of alleged coup plotters detained after the fighting began more than three weeks ago, a demand rejected by Juba. But mediators returning from Juba Wednesday said the detainees wanted a political solution to the crisis and did not want arguments over their liberation to block a potential ceasefire. "The discussions have made progress on a proposed cessation of hostilities," US State Department spokeswoman Jen Psaki said in Washington. "Disagreements remain on the issue of the release of political detainees. Obviously, the discussions are continuing, but that's where things stand at this moment," she added. The unrest began on December 15 as a clash between army units loyal to South Sudan's President Salva Kiir and those loyal to ex-vice president Riek Machar. It has escalated into war between government troops and a loose alliance of ethnic militia forces and mutinous army commanders. Thousands of people have already been killed, aid workers say, while more than 200,000 have fled their homes -- many of them seeking protection from overstretched UN peacekeepers amid a wave of ethnic violence pitting members of Kiir's Dinka tribe against Machar's Nuer tribe. The government is currently holding 11 of Machar's allies, many of them senior figures and former ministers, and has been under pressure from IGAD as well as Western diplomats to release them as a goodwill gesture. The demands have been resisted until now, with the government arguing the detainees should be put on trial for their role in what the president says was an attempted coup. The detainees in question stated that their status "should not be an impediment to reaching an agreement on cessation of hostilities," said mediators from the East African regional bloc, IGAD, in a statement following a prison visit.   However, military officials from both sides said that a major battle was still raging for control of Bor, capital of Jonglei State and situated just north of Juba. Fighting was also taking place in the oil-producing Upper Nile State, while the rebels said more troops previously based in Juba had defected from the government side and could launch an assault on the capital. "Our forces are coordinating themselves," rebel spokesman Moses Ruai Lat said, adding that anti-government fighters were preparing to strike Juba and Malakal, capital of Upper Nile State. National army spokesman Philip Aguer confirmed fighting was in progress around Bor. An AFP reporter reached the town of Minkammen, 25 kilometres (16 miles) south of Bor, and said the area was flooded with fleeing civilians and that the rumble of heavy artillery fire could be heard in the distance. "People fleeing the fighting around Bor keep coming by boat every day, we are doing our best to support them," said John Parach, a local government relief coordinator. Negotiations between the rival parties were expected to resume Thursday in Addis Ababa. 'Uganda will not pull out troops' Uganda meanwhile rejected demands by the South Sudanese rebels and MPs in Kampala that it withdraw its troops from South Sudan, following accusations that it was siding with the Juba government. "We will not pull out our troops because we are in South Sudan at the request of the legitimate South Sudanese government to evacuate Ugandan civilians who are trapped there," government spokesman Ofwono Opondo said. Ugandan troops "are in South Sudan and notably protect Juba airport and key government facilities but we are not involved in any fighting", he added. The humanitarian crisis in South Sudan continued to worsen, with Peter Maurer, the president of the International Committee of the Red Cross (ICRC), describing the situation as "dire". He also appealed to the warring factions to "respect humanitarian law". The exact toll of the conflict is unclear. The UN has said well over a thousand people have died, although sources from a number of relief organisations say they believe the number of fatalities is well into the thousands.