By Aaron Maasho and Carl Odera
JUBA, Dec 30 (Reuters) - Uganda's president said on Monday East African nations had agreed to unite to defeat South Sudanese rebel leader Riek Machar if he rejected a ceasefire offer, threatening to turn an outburst of ethnic fighting into a regional conflict.
Two weeks of clashes have already killed at least 1,000 people in the world's newest nation, rocked oil markets and raised fears of a civil war in a region ravaged by fighting in Central African Republic and Democratic Republic of Congo.
"We gave Riek Machar four days to respond (to the ceasefire offer) and if he doesn't we shall have to go for him, all of us. That is what we agreed in Nairobi," Ugandan president Yoweri Museveni told reporters in South Sudan's capital, Juba.
Asked what that meant, Museveni said: "to defeat him."
There was no immediate confirmation of the pact from other countries, including economic powerhouses Kenya and Ethiopia, who have been trying to mediate and last week gave the sides until Dec. 31 to lay down their weapons.
The United Nations, Washington, and other Western countries who have poured millions of dollars of aid into South Sudan since it won its independence from Sudan in 2011, have also scrambled to stem the unrest.
Fighting between rival groups of soldiers erupted in the capital Juba on Dec. 15, then triggered clashes in half of South Sudan's 10 states - often along ethnic lines, between Machar's group, the Nuer, and President Salva Kiir's Dinka.
Kiir, who sacked Machar in July, accused him of starting the fighting in a bid to seize power - a charge denied by Machar. He has since retreated into the bush and acknowledged he is leading rebel fighters.
The fighting, alongside unrest in Libya, has lifted oil prices, holding it above $112 a barrel on Monday. South Sudan has the third-largest oil reserves in sub-Saharan Africa after Angola and Nigeria, according to BP.
WHITE ARMY THREAT
Machar has responded coolly to the ceasefire offer and the army has said it has continued to fight his soldiers.
Thousands of people fled South Sudan's flashpoint town of Bor as the army warned of an imminent attack by the Nuer "White Army" militia on Monday, officials said.
The White Army - made up of Nuer youths who dust their bodies in white ash - has in the past sided with Machar.
But a spokesman for the government of South Sudan's Unity state, now controlled by forces loyal to Machar, on Sunday denied he was in control of the White Army fighters, raising the prospect that the violence was spreading beyond the control of widely-recognised ethnic leaders.
"The (White Army) are now not very far from Bor so an attack is imminent," Sudan army (SPLA) spokesman Philip Aguer said by phone from Juba, 190 km (120 miles) south of Bor by road.
Civilians had fled the town, crossing the White Nile river and heading for the swamps, Information Minister Michael Makuei told Reuters. Nuer militias massacred Dinkas in Bor during an outburst of ethnic fighting in 1991.
Bor's mayor, Nhial Majak Nhial, said he was urging civilians to escape Bor, the capital of Jonglei state, as the White Army militia neared.
"They have attacked the village of Mathiang (18 miles from Bor), killing civilians and burning civilian houses down. They are butchering civilians," Nhial told Reuters from Bor.
The reports of clashes and advances came from remote areas largely inaccessible to journalists and it was not possible to verify them independently.
SPLA spokesman Aguer said an SPLA reconnaissance unit clashed with White Army militia on Sunday night. Tribal elders over the weekend persuaded many of the Nuer youths to abandon their march, but officials said about 5,000 refused to turn back.
"People in Bor are scared," Makuei told Reuters. "Some of them have turned towards the swamps, and motorboats are crossing frequently to the other bank of the (White Nile) river. (Writing by Drazen Jorgic; Editing by Richard Lough and Andrew Heavens)