* Peace deal signed in 2015 proved shaky from outset
* Opposition said reorganising for "armed resistance"
* Conflict pits president against his former deputy
By Denis Dumo
JUBA, Oct 4 (Reuters) - South Sudanese rebels said on Tuesday they had clashed with government forces in the state of Central Equatoria, more evidence the five-year-old nation was sliding back into conflict after a peace agreement fell apart.
The government denied reports of fighting, but a commander in the SPLA-In-Opposition, Major Dickson Gatluak, said clashes took place around the towns of Yei, Morobo and Kaya, although he said rebels had pulled out from some of those areas.
"A lot of people, especially the local civilians in Yei, are trapped," Gatluak told Reuters. "Most of them are in the airport, some have taken refuge in churches. So we need these people to get out, because we don't want to do harm to civilians."
The United Nations said on Sept. 30 it was concerned for the safety of 100,000 people trapped in Yei, which lies about 150 km southwest of South Sudan's capital, Juba. They included residents and about 30,000 people who had fled to Yei from surrounding areas.
A government spokesman said the area was calm. "The government is controlling all this areas," Steven Ladu Onesimo told Reuters. Roads to the area were being opened, he said.
A peace agreement between opposition leader Riek Machar and President Salva Kiir ended two years of fighting in August 2015. But it fell apart in July as fighting broke out in Juba between forces loyal to each.
Machar fled the capital, and last month he ordered his forces to reorganise for "armed resistance" if the government failed to revive the agreement and restore his position as vice president.
The failure of the peace process has threatened a slide back into a full-blown civil war in a nation that produces oil but remains one of the poorest on earth.
In a statement on Tuesday, the government said its "funding position is uncertain and volatile", so it would take "monthly, weekly and daily decisions on spending, borrowing and saving" to keep the state functioning.
Last month, the government said it would seek $300 million in aid and loans to support its 2016/17 budget.
The conflict has left swathes of the 11 million people without enough food and has driven inflation up to 729.7 percent year-on-year as of August, according to official data.
(Writing by George Obulutsa; Editing by Edmund Blair, Larry King)
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