South Sudan said on Friday it will start the immediate withdrawal of its troops from the Heglig oil region, following the worst border violence between Sudan and the South since secession.

South Sudan's Information Minister Barnaba Marial Benjamin told reporters the withdrawal will be completed within three days.

The newly-independent South last week seized the Heglig oilfield, previously under Sudan's control. Khartoum vowed to recapture the region and global powers have urged the South to withdraw to avert a broader war.

Fighting between the two sides has been fuelled by territorial disputes, ethnic animosity and quarrels over oil.

The Republic of South Sudan announces that SPLA troops have been ordered to withdraw from Panthou (Heglig), Benjamin said, citing orders from President Salva Kiir.

An orderly withdrawal will commence immediately, and shall be completed within three days, he said.

South Sudan wants the status of Heglig to be determined by international arbitration, Benjamin added.

Sudan's President Omar Hassan al-Bashir all but declared war against the South on Thursday, vowing to teach its rulers a final lesson by force.

Philip Aguer, spokesman for South Sudan's army, said earlier on Friday that aerial bombardment had caused the central processing facility at Heglig to catch fire on Thursday.

A MiG yesterday bombed oil facilities in Heglig and one facility was hit, the central processing facility, which separates water from crude oil, he said. It caught fire yesterday and was burning.

Aguer said the oilfield was still under the South's control on Thursday evening after it repulsed a large attack, but there was no immediate comment on his claims from Sudanese officials.

Limited access for independent journalists to Sudan's remote conflict zones makes it difficult to confirm the often contradictory claims issued by all sides.

Disputes over ideology, religion, ethnicity and oil fuelled Sudan's civil war, waged for all but a few years from 1955 to 2005. Some 2 million people died in the conflict.

(Reporting by Ulf Laessing and Hereward Holland; Writing by Alexander Dziadosz; Editing by Louise Ireland)