JUBA, South Sudan -- The U.S. special envoy to Sudan and South Sudan acknowledged in an interview Wednesday that the two countries are at war and warned that the conflict will likely spread if South Sudan does not withdraw from a disputed oil town that it captured from Sudan last week.

So far, however, South Sudan has refused to do so, and the South Sudanese military has said it plans to continue its offensive north. On Sunday, a McClatchy correspondent was among the first journalists to visit Heglig, the captured town, now an edgy command post for South Sudan’s army and allied rebels from Sudan’s Darfur region.

The statement comes as the United Nations Security Council mulls putting sanctions on Sudan and South Sudan in an effort to stop the hostilities, which could spoil a decade of intense diplomacy for peace.

U.S. special envoy Princeton Lyman said he had been meeting with South Sudanese officials in an effort to persuade them to withdraw. “We felt it was extremely dangerous (to enter Heglig) and that they should withdraw,” Lyman said, characterizing the American position. “That’s been the basis of my discussions here.”

“This is beyond self-defense,” Lyman said of South Sudan’s offensive, adding that without a South Sudanese withdrawal, the fighting could spread “well beyond Heglig” and the war would get “nastier and nastier.”

The conflict has put Washington in a difficult position. U.S. policy has long favored South Sudan over Sudan, partly in response to a pro-South Sudan lobby in the U.S. that sees South Sudanese as victims of Sudan’s northern, Arab elites.

But now, South Sudan is its own country, and the country is quickly wearing down its friendly welcome to the international stage, even among its well-wishers.

"Our good friend South Sudan has become extraordinarily impatient. And we think they’ve taken great risks," Lyman said.

Unofficially, South Sudanese officials have delighted in their capture of Heglig, which they consider a South Sudanese territory that was annexed illegally into the north in the 1970s. At the border itself, there is no talk of withdrawal, only of pushing the front lines further north.

It is not clear who fired the first shot in the battle over Heglig. South Sudan has been adamant that it captured Heglig only after repulsing a Sudanese attack on its side of the de facto border.

One source close to the South Sudanese government claimed that South Sudan was caught off guard by the initial attack, in late March, and said that the next round of fighting a week later was also an act of Sudanese aggression.

But several neutral, well-informed officials noted privately that there is no evidence of who started the fighting, and that there were clear incentives on both sides of the border to begin a war.

For one, South Sudan was already suffering the pains of losing its oil revenue after it shut down production in January over a dispute with Sudan on how much it should be paid for transportation services. Now, by capturing Heglig, South Sudan has robbed Sudan of one of its largest fields _ and of the revenue generated by the 55,000 barrels of oil produced there a day.

The U.S. has condemned for Sudan for its air bombing raids in South Sudan territory, killing civilians. Lyman characterized the Sudanese government as "very belligerent" at the moment. After Juba, he is flying to Khartoum, Sudan’s capital, for talks there.