* Security Council envoys met Kiir, Machar during trip
* They warned both of possible tougher sanctions
* Without peace soon, South Sudan risks "man-made" famine
* Abuses, ethnic killings being investigated
By Drazen Jorgic
MOGADISHU, Aug 14 (Reuters) - South Sudan President Salva Kiir and rebel chief Riek Machar show little interest in making a deal to end months of fighting that has brought the nation to the brink of "man-made" famine, U.N. Security Council envoys said during a visit to East Africa.
Clashes in December between soldiers loyal to Kiir and supporters of his former deputy Machar plunged the oil-producing country back into conflict, less than three years after its hard-won independence from former civil war foe Sudan.
Kiir and Machar signed a ceasefire in May in Addis Ababa and agreed to form an interim government within 60 days but that deadline expired on Aug 10 as talks stalled. Diplomats say both sides violated the truce, though negotiations continue.
Samantha Power, the U.S. ambassador to the United Nations who along with other Security Council envoys visited South Sudan this week and talked to both Kiir and Machar, said the Council had warned the rival sides about tougher sanctions.
"There is no way President Kiir or Riek Machar could have left those meetings with the Security Council unclear about the determination of the Council to take further measures if they did not seize this moment and choose compromise and choose peace," Power told Reuters late on Wednesday.
The United States and European Union have slapped sanctions on military commanders from both sides and on Wednesday, Washington warned it may impose further measures.
Asked if the delegation felt Kiir and Machar had shown appetite for a peace deal, Power said: "We left the meeting with hope, I don't think any of us left the meeting with confidence."
At least 10,000 people have been killed and more than 1.1 million displaced during nearly eight months of on-off fighting in South Sudan. Power said 50,000 children under five were at risk of dying of malnutrition in the coming months.
Aid agencies say South Sudan is hurtling towards the worst famine in East Africa since the mid-1980s, when malnutrition swept through the region and killed over a million people.
"It is a man-made humanitarian crisis and it would be a man-made famine if it came to that," said Power, who spoke on board a plane from Mogadishu to Nairobi, where the U.N. delegation met with Kenyan President Uhuru Kenyatta and members of the regional IGAD bloc mediating the South Sudan peace talks.
Council diplomats who were present at the meeting with Kiir in the capital Juba on Tuesday and the video conference with Machar later that day, said the two leaders were preoccupied with trading blame over the conflict instead of seeking a deal.
"There is still a large gap between them," said one Council diplomat during the South Sudan stop which included a tour of a U.N. camp in Malakal, where 18,000 people shelter in ramshackle tents bound with plastic string and covered with tarpaulins.
"They both said they recognise there is no military solution to the conflict and there had to be a settlement but we didn't sense from either of them that there was a great willingness to compromise at this stage," added the diplomat.
A third envoy called the two "divorced from reality".
Senior U.N. officials who briefed Power and the U.N. delegation in Juba said both government officials and rebels regularly harass aid workers and block food deliveries to rural regions so their side can gain a tactical advantage.
"That has to stop and that's a message we send to both Kiir and Machar," said Power, who on Wednesday became the first member of a United States Cabinet to visit Somalia since 1993.
The chief mediator of the South Sudan peace talks, IGAD's Special Envoy Seyoum Mesfin, told the U.N. envoys that Machar's team was frustrating the negotiations but gave no more details.
On the possibility of further sanctions, diplomats say the United Nations is likely to take its cue from regional grouping IGAD, with China and Russia more likely to approve sanctions if they are backed by this body.
Much of the fighting in South Sudan has played out along ethnic fault lines, with Kiir's Dinka community battling Machar's Nuer. The U.N. and aid agencies have accused both sides of ethnic-based massacres and grave human rights violation.
Power said an African Union report into these abuses was awaited but added those who had committed killings based on ethnicity or alleged "kill lists" must be held accountable.
"If those crimes go unpunished, it would be almost impossible for the communities to trust one another again," said the former journalist, who has written a book about genocide. (Editing by Pascal Fletcher)