* Heavy shelling continued for several hours near Bentiu
* U.N. envoys warned of sanctions if ceasefire violated
* Deadline to form interim govt lapsed, talks continue
By Carl Odera
BENTIU, South Sudan, Aug 15 (Reuters) - Government troops clashed with South Sudan rebels on Friday near the capital of the oil producing Unity State, a U.N. official said, days after a U.N. Security Council delegation warned of sanctions if either side violated a ceasefire signed in May.
Heavy shelling and gunfire near Bentiu started around 6 a.m. and continued for several hours, said a Reuters correspondent in a nearby U.N. base that is sheltering 29,000 people displaced by months of fighting.
A senior U.N. official at the base said the rebels had clashed with government troops 300 metres west of Rubkona Airstrip, which is about 6 km (4 miles) north from Bentiu. It was not clear who instigated the fighting.
Bentiu was the scene of one of the worst massacres of the conflict when rebels in April hunted down and slaughtered hundreds of civilians who had sought refuge in a hospital, mosque and a Catholic church.
The violence will further strain a shaky ceasefire which was signed in May but violated by both sides since then, according to diplomats. A 60-day deadline to form an interim government lapsed on Aug. 10, though negotiations continue.
A U.N. Security Council delegation, headed by Samantha Power, the United States ambassador to the United Nations, this week visited South Sudan and warned President Silva Kiir and rebel chief Riek Machar that both sides may face sanctions if they did not commit to the peace talks.
The envoys who were part of the delegation also cast doubt on Kiir and Machar's desire to strike a lasting peace deal.
The United States and European Union have already slapped sanctions on commanders from both sides for violating a January ceasefire which swiftly collapsed. The United States on Wednesday said it might impose further measures if the May truce was violated.
Bentiu has changed hands several times since fighting broke out in the capital Juba on Dec. 15. The violence that ensued has often been fought along ethnic fault lines, pitting Kiir's Dinka community against Machar's Nuers.
Medical charity Medecins Sans Frontieres (MSF) last week said conditions in the United Nations base near Bentiu, where thousands of people live in ramshackle tents flooded with water and sewage up to their knees, were "an affront to human dignity". (Writing by Drazen Jorgic; Editing by James Macharia and Alison Williams)