* African Union urges calm
* Vice President, negotiator in dispute with Khartoumsuspended
* South Sudan faces biggest shake-up since independence in2011
By Aaron Maasho
ADDIS ABABA, July 25 (Reuters) - The African Union urgedSouth Sudan's President Salva Kiir on Thursday to quickly form anew government and respect the country's diversity in doing soafter Kiir sacked his cabinet amid talk of a successionstruggle.
Analysts say Kiir was trying to stem dissent and divisionsinside his ruling Sudan People's Liberation Movement(SPLM) partyover endemic corruption and an economic crisis, largely theresult of disputes with Sudan that have prevented South Sudanexporting crude oil.
Vice President Riek Machar and Pagan Amum, SPLM SecretaryGeneral and South Sudan's top negotiator at talks with Sudanover the export of oil through Sudan, were among those suspendedunder a presidential decree announced on Tuesday.
But the biggest shake-up since South Sudan won independencetwo years ago comes at a particularly bad time as the countrygrapples with the dispute over oil flows with its northernneighbour, and with escalating rebel and tribal violence.
The African Union (AU) called on Juba to take measures tomaintain calm and prevent violence.
"They ... call on the leaders of South Sudan to expedite theformation of a new cabinet," the Addis Ababa-based body said ina joint statement, alongside regional bloc IGAD, the UnitedStates, Britain, Norway and Switzerland.
"We encourage South Sudan to do so in a manner that reflectsthe diversity of the South Sudanese people, and in conformitywith its transitional constitution and the democratic ideals thenew country has espoused."
Machar, an ethnic Nuer, had recently hinted that he mightchallenge Kiir - a member of the dominant Dinka ethnic group -for the SPLM leadership before national elections in 2015. Kiirhad already stripped Machar of some his duties in April in whatseemed to be a move to curb his profile.
The men were on opposing sides of a split within the SPLMduring much of the 1983-2005 civil war with Khartoum.
Amum - an ethnic Shilluk - had recently criticised Kiir forsuspending two ministers in a fraud probe, according to localmedia. The presidential decree, announced on Tuesday, said aparty committee would investigate him. (Editing by George Obulutsa and Susan Fenton)
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