Five soldiers died when heavy fighting broke out in the main military barracks in war-torn South Sudan's capital Juba on Wednesday, underscoring serious tensions within the national army as it battles a rebel uprising.

Fierce gunfire lasting two hours was heard coming from the main barracks near Juba University, home to the presidential guards and other elite troops, from 9:30 am (0630 GMT).

The government played down the violence as resulting from a "misunderstanding" over pay. Army spokesman Malak Ayuen told AFP five soldiers had been killed and that those found responsible would face a court martial.

"It's unfortunate that this morning fighting ensued among the commandos themselves over salary," he said.

"What happened was a misunderstanding among the commandos and it ended in their unit."

According to independent Tamazuj radio, the fighting started after soldiers argued with a military pay committee. Other local media carried unconfirmed reports that the fighting broke out between guards loyal to President Salva Kiir and a commando unit under top general Gatwech Gai.

The US embassy in Juba issued a statement advising people to stay indoors as hundreds of terrified residents flooded the main church in Juba, fearing a major outbreak of violence.

"When the fighting started we immediately ran to the church for protection," said Annet Sitima, a local woman.

The conflict in South Sudan started in the capital Juba under similar circumstances nearly three months ago amid tensions within the ruling party between President Kiir and former vice president Riek Machar.

The December 15 clashes, which spilt the army along ethnic lines, quickly spread across the country.

Since the initial week of fighting in Juba, the capital has been largely calm and key installations have been guarded by Ugandan troops, who intervened in the conflict in support of President Kiir.

Fighting between the national army and the rebels -- made up of defectors and ethnic militia -- has been centred around the towns of Bor, Malakal and Bentiu further north.

The unrest in South Sudan, the world's newest nation which won independence from Khartoum in 2011, has left thousands dead and has displaced close to 900,000 people, including tens of thousands who have crammed into UN bases in fear of ethnic attacks.

The government and rebels signed a ceasefire on January 23, but the truce has seen frequent violations -- including a rebel assault on Malakal.

In neighbouring Ethiopia, regional bloc IGAD, which has been trying to broker peace talks aimed at addressing the root causes of the conflict, said efforts to resolve the conflict were making progress, albeit very marginal.

"What has been going on for the last two weeks was in short can be characterised as talks about talks," IGAD special envoy Seyoum Mesfin told reporters.

On Tuesday IGAD said the government and rebels would be taking a two-week break from the negotiations, with the peace talks scheduled to resume on March 20.