* Conflict increasingly fought along ethnic lines
* South Sudan army has been hurt by mass defections
* U.N. says readying sanctions against both sides
By Carl Odera
JUBA, April 24 (Reuters) - South Sudan's President Salva Kiir has sacked his army chief, a military spokesman said, replacing him with a loyalist from his own ethnic group as the country's four-month conflict shows signs of being increasingly fought along tribal lines.
Kiir also replaced his head of intelligence, days after government troops were routed from a major oil hub by rebels loyal to Kiir's former deputy Riek Machar, and hundreds of civilians were massacred.
Army spokesman Philip Aguer said General Paul Malong, a stalwart of the Sudan People's Liberation Army (SPLA), had replaced army chief General James Hoth Mai.
The violence in the central African state, the size of France, has mainly pitted Kiir's Dinka people against Machar's Nuer. Thousands have been killed and more than one million people uprooted from their homes.
"Malong is a Kiir loyalist and a Dinka hardliner," said one analyst who did not wish to be identified.
Mai was the most prominent Nuer within the SPLA, a former guerrilla force which became the national army of the south after the end of the civil war with Sudan in 2005.
He had been seen as an emblem of Dinka-Nuer cooperation within the military, and his removal was unexpected, said Jonah Leff, Africa analyst with Conflict Armament Research.
The SPLA has been riven by defections since fighting broke out in December. Many former Nuer militia fighters who were incorporated into the SPLA after independence from Sudan in 2011 have defected to join Machar's ranks.
Intelligence chief Paul Mach was replaced by General Marial Nour Jok, spokesman Aguer said. Both men are Dinka.
President Kiir did not give a reason for the sackings, which were announced on national television on Wednesday night.
OIL FIELDS THREATENED
After capturing Bentiu last week, rebels aligned to Machar hunted down men, women and children hiding in a mosque, church and hospital and then killed them based on their ethnicity, the United Nations says.
The rebels deny the allegation. But they acknowledge they are targeting South Sudan's oil fields, an economic lifeline that pays for the vast majority of the government's budget.
A ceasefire signed by the two sides in January failed to hold.
U.N. Security Council members are considering sanctions on South Sudan's warring parties after U.N. peacekeeping chief Herve Ladsous demanded "serious consequences" be imposed on both sides to force an end to the violence.
Rebel spokesman Lul Ruai Koang said Machar's forces took over Renk town and were nearing Paloch in the Upper Nile State, the biggest oil installation in the country. He said the rebel side again called on oil companies to "stop production and evacuate staff/employees to avoid being caught in crossfire".
Aguer, however, said the SPLA had fought off rebels in Renk. Access to these remote areas is difficult for journalists, making it hard to independently verify the accounts.
The East African IGAD bloc brokering the peace talks between the two sides said the conflict was disrupting economic activity in the region and stopping food production at a time when South Sudan is at risk of a serious famine.
"(IGAD) calls on the international community to act now to put pressure on both parties to stop the war and prevent a deeper catastrophe from unfolding in South Sudan," the bloc said in a statement.
Faltering peace talks are expected to resume in the Ethiopian capital Addis Ababa on April 28. (Additional reoprting Aaron Masho in Addis Ababa and Drazen Jorgic in Nairobi; Writing by Drazen Jorgic; Editing by Richard Lough and Mark Trevelyan)
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