(Adds South Sudan government comment in paragraphs 9-11)
By Michelle Nichols
UNITED NATIONS, March 17 (Reuters) - South Sudan's government is mainly to blame for famine in parts of the war-torn country, yet President Salva Kiir is still boosting his forces using millions of dollars from oil sales, according to a confidential United Nations report.
U.N. sanctions monitors said 97 percent of South Sudan's known revenue comes from oil sales, a significant portion of which is now forward oil sales, and that at least half of the budget - "likely substantially more" - is devoted to security.
"Revenue from forward oil sales totaled approximately $243 million between late March and late October 2016," the panel of U.N. monitors said in the report to the U.N. Security Council, seen by Reuters on Thursday.
"Despite the scale and scope of the political, humanitarian, and economic crises, the panel continues to uncover evidence of the ongoing procurement of weapons by the ... Government for the SPLA (South Sudanese army), the National Security Service, and other associated forces and militias," the report said.
The United Nations has declared a famine in some parts of the world's youngest country, where nearly half its population - some 5.5 million people - face food shortages. A civil war erupted in 2013 when Kiir, an ethnic Dinka, fired his deputy Riek Machar, a Nuer, who has fled and is now in South Africa.
"The bulk of evidence suggests that the famine ... has resulted from protracted conflict and, in particular, the cumulative toll of military operations undertaken by the SPLM/A in Government in southern Unity state; denial of humanitarian access, primarily by the SPLM/A in Government; and population displacement resulting from the war," the report said.
The United Nations says at least one quarter of South Sudanese have been displaced since 2013.
South Sudan's government rejected the report on Friday.
"We have not bought arms for the last of two to three years," government spokesman Michael Makuei Lueth told reporters after a cabinet meeting.
"We have rights to buy arms for self-protection or self-defense ... So this idea of the U.N. saying the government of South Sudan doesn't care about its people and they are fan of buying arms all the time is not correct," he said.
The annual report of the sanctions monitors to the 15-member Security Council comes ahead of a ministerial meeting of the body on South Sudan next Thursday, which is due to be chaired by British Foreign Secretary Boris Johnson.
While the previous U.S. administration of President Barack Obama was heavily involved in the birth of South Sudan, which gained independence from Sudan in 2011, and led Security Council efforts to try to end the civil war, the policy of new U.S. President Donald Trump toward the African state is unclear.
In December, the Security Council failed to adopt a U.S.-drafted resolution to impose an arms embargo and further sanctions on South Sudan despite warnings by U.N. officials of a possible genocide. The U.N. monitors again recommended in their report that the council impose an arms embargo on South Sudan.
The Security Council set up a targeted sanctions regime for South Sudan in March 2015 and has blacklisted six generals - three from each side of the conflict - by subjecting them to an asset freeze and travel ban.
The U.N. monitors said all parties to the conflict continue to commit widespread human rights violations "with near complete impunity and a lack of any credible effort to prevent these violations or to punish the perpetrators."
U.N. peacekeepers have been in South Sudan since 2011.
(Additional reporting by Denis Dumo in Juba; Editing by Phil Berlowitz)
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