The flash point is the disputed border region of Abyei, a key oil-producing zone that's vital to both sides.
Hundreds of people, many of them civilians, have been killed in clashes over the last few weeks as the south, impoverished by the civil war and able to boast only 50 miles of tarred road, moves toward its date with destiny -- formal statehood on July 9.
Clashes were also reported in oil-rich Unity State, another border area, with more than 100 dead and thousands forced to flee.
U.S. Sen. John Kerry, D-Mass., chairman of the Senate Foreign Relations Committee, warned that Sudan "stands ominously close to the precipice of war."
Renewed civil war now, with both sides having rearmed on a large scale since a Comprehensive Peace Agreement was signed in 2005, would reverberate across East Africa, where major oil strikes have brought the promise of a brighter economic future.
During the civil war, in which some 2 million people died, Khartoum was accused of arming militias in neighboring states to destabilize the south.
A new conflict would undoubtedly flood Uganda, Kenya, Ethiopia and others with Sudanese refugees as they were before.
Sudan's northern army seized control of Abyei Saturday after weeks of skirmishing between the forces of the Sudan People's Liberation Movement and southern renegade militias supported by the Muslim regime in Khartoum.
The south branded the northern invasion of the ethnically mixed region "a declaration of war" and vowed to "respond in self-defense."
Khartoum claimed it sent armored columns into the region's main town in response to a southern attack on its troops in Abyei Thursday, violating the 2005 Comprehensive Peace Agreement that ended the civil war and paved the way for the January referendum.
Western diplomats confirmed the southern attack Thursday and said it was the second such operation in Abyei this month.
That suggested the SPLM government had provoked the confrontation, possibly in hopes of prompting outside military intervention to block the more powerful northern forces.
A delegation from the U.N. Security Council was visiting Sudan at the time. A scheduled visit to Abyei, the eye of the storm, was canceled.
Foreign diplomats were doubtful that outside powers have any leverage over Khartoum.
The International Criminal Court issued an arrest warrant for Sudan's president, Omar al-Bashir, March 4, 2009, accusing him of war crimes in Darfur.
Sudan's ambassador in neighboring Kenya, Kamal Ismail Saeed, claimed 197 northern soldiers were killed or missing in the May 19 southern attack. Another report put the death toll at 70, with more than 200 still missing.
The United Nations, some of whose peacekeepers were wounded in the clashes, condemned the southern strike and called on northern forces to withdraw from Abyei immediately.
No such pullback has been forthcoming and there was no sign that either side was prepared to give any ground.
Whatever the cause of the sharp escalation in fighting that has been building for several weeks, many observers say the northern operation appeared to have been well-planned.
Right after the northern convoy was attacked Thursday, Khartoum's air force began two days of bombing Abyei.
Doctors Without Borders reported that by Sunday morning almost the entire population of the Abyei Town had fled south.
On Saturday, a northern ground force of around 5,000 troops, spearheaded by an artillery bombardment and at least 15 Soviet-era tanks, thrust into the area from several directions.
Diplomatic efforts to defuse the crisis have failed to make headway.
And despite observers' insistence that both sides have been playing rough, most see Khartoum, which never wanted an independent south because it has most of the country's oil reserves, as the main villain.
U.S. President Barack Obama's special envoy to Sudan, Ambassador Princeton Lyman, Sunday called the northern thrust into Abyei "a disproportionate response" to Thursday's fighting.
He warned that if Khartoum didn't pull out the process of normalizing relations between the United States and Sudan would be seriously impaired.
The United States withdrew its ambassador to Khartoum in 1998, accusing the regime of sponsoring terrorism.