* Most of the dead were children - development official
* Rebels, government fighting for control of Malakal
* Ugandan opposition questions deployment of troops (Adds updated information from United Nations, background)
By Carl Odera
JUBA, Jan 14 (Reuters) - Scores of South Sudanese drowned when a packed ferry capsized in the White Nile near the capital of an oil-producing region where government forces and rebels have fought for control, officials said on Tuesday.
A government spokesman said about 200 people died as they took to the river to flee clashes in Malakal, a major transit point and administrative centre of Upper Nile state.
Another official in charge of disaster relief said he could not give a death toll because of poor communications with the area.
"The boat was overloaded with people," said Banak Joshua, the director general of disaster management at the Humanitarian Affairs Ministry. He declined to say how many died.
"Most of the casualties were children because the adults probably swam to safety," he told Reuters.
Rebels led by former Vice President Riek Machar said on Tuesday they had seized control of Malakal, which lies 330 miles (530 km) north of the capital, a report denied by President Salva Kiir's government, which said their rivals were repelled.
"There has been fighting today until 5 p.m. The rebels have been ... repulsed," said presidential spokesman Ateny Wek Ateny, responding to the rebel claim, which was made on the sidelines of peace talks in Addis Ababa.
U.N. spokesman Martin Nesirky told reporters in New York that as a result of Tuesday's violence, the number of uprooted people seeking refuge at the U.N. base in Malakal has nearly doubled to 20,000. Almost 1,000 peacekeepers there - including 110 newly arrived police - are protecting civilians, he said.
The South Sudanese presidential spokesman said 200 people had died after the ferry capsized and accused rebels of driving panicked residents out of town. Nesirky said the U.N. mission in South Sudan was trying to verify reports of casualties from the ferry accident.
Fighting that erupted in mid-December has reopened ethnic faultlines. According to one estimate, the conflict may have killed as many as 10,000 people, although there is no official toll for those killed in the desperately poor nation. The United Nations has said that well over 1,000 people have died.
PEACE TALKS 'PROGRESSING WELL'
The UNHCR, the U.N. refugee agency, said that 355,000 people in South Sudan have been forced to flee their homes, up from 200,000 last week. It also said that around 78,000 of them have fled abroad. The U.N. humanitarian aid coordinator's office in New York, however, said around 413,000 South Sudanese - nearly half a million - have been displaced by the fighting.
Nesirky said U.N. peacekeepers were protecting more than 65,000 civilians who have sought refuge at U.N. bases across the country.
Peace talks in the Ethiopian capital that began this month have made little obvious progress till now, with the government rejecting rebel demands for the release of 11 of their political allies jailed after they were accused of attempting a coup.
The United States is weighing targeted sanctions against South Sudan due to the failure of leaders in the world's youngest nation to take steps to end a crisis that has brought the country to the brink of civil war, sources briefed on U.S. discussions told Reuters last week.
Michael Makuei, government spokesman at the talks, said talks had moved forward and the two sides had agreed to discuss the cessation of hostilities and detainees separately.
"We are progressing well, and probably by tomorrow (Wednesday) we may agree on the cessation of hostilities," he said. "Thereafter, we will move to the other topic, which is the issue of the detainees."
In Uganda, which sent troops to South Sudan days after fighting erupted last month, opposition lawmakers said the government should have sought an international mandate for the deployment and should set a time limit on the troops' stay.
"For us to be involved in South Sudan we must follow international regulations," opposition MP Jack Wamanga said during a parliamentary debate, called to seek parliamentary approval for the move.
He said Uganda should have sought backing from the United Nations, the African Union or IGAD, the regional African group that is sponsoring the peace talks in Ethiopia.
Ugandan President Yoweri Museveni, himself a former rebel-turned-statesman whose supporters dominate parliament, backed President Kiir's SPLA rebels during Sudan's civil war before South Sudan split from Khartoum in 2011 as part of a 2005 U.S.-backed peace deal that ended decades of civil war.
The government has not said how many troops it has sent to its northern neighbour, but last month military sources told Reuters it involved deploying hundreds of soldiers.
Officials initially said the soldiers would help evacuate Ugandans stuck in South Sudan but has since admitted they were protecting Juba's airport and the presidential palace.
Rebels have accused Uganda of deeper support for Kiir's forces, including mounting air raids. Uganda denies this. (Additional reporting by Elias Biryabarema in Kampala and Louis Charbonneau in New York; Editing by Edmund Blair and Andrew Heavens)