Government forces moved into the town, the capital of Unity State, on Sunday.
But it appears at least a section of the troops have been forced to retreat, our correspondent says.
The town of Bentiu has changed hands several times since fighting broke out in South Sudan last December
Fighting broke out in December and has driven some one million people from their homes
He saw government soldiers withdrawing past the UN compound where he is based on Monday.
It is unclear which side currently has control of the town.
The fighting comes after the US Secretary of State John Kerry said on Friday he had secured an agreement from President Kiir and Mr Machar for peace talks to be held in Addis Ababa.
The power struggle between the two men - who fought together in the civil war before South Sudan's independence - has increasingly taken on an ethnic dimension.
Mr Kiir is a member of the country's largest group, the Dinka, while Mr Machar is from the second-biggest, the Nuer.
The conflict has displaced about a million people, and both sides have been implicated in atrocities and war crimes.
The UN has about 8,500 peacekeepers in South Sudan, which became the world newest state after seceding from Sudan in 2011.
Fighting erupted in the South Sudan capital, Juba, in mid-December. It followed a political power struggle between President Salva Kiir and his ex-deputy Riek Machar. The squabble has taken on an ethnic dimension as politicians' political bases are often ethnic.
Sudan's arid north is mainly home to Arabic-speaking Muslims. But in South Sudan there is no dominant culture. The Dinkas and the Nuers are the largest of more than 200 ethnic groups, each with its own languages and traditional beliefs, alongside Christianity and Islam.
Both Sudan and the South are reliant on oil revenue, which accounts for 98% of South Sudan's budget. They have fiercely disagreed over how to divide the oil wealth of the former united state - at one time production was shutdown for more than a year. Some 75% of the oil lies in the South but all the pipelines run north.
The two Sudans are very different geographically. The great divide is visible even from space, as this Nasa satellite image shows. The northern states are a blanket of desert, broken only by the fertile Nile corridor. South Sudan is covered by green swathes of grassland, swamps and tropical forest.
After gaining independence in 2011, South Sudan is the world's newest country - and one of its poorest. Figures from 2010 show some 69% of households now have access to clean water - up from 48% in 2006. However, just 2% of households have water on the premises.
Just 29% of children attend primary school in South Sudan - however, this is also an improvement on the 16% recorded in 2006. About 32% of primary-age boys attend, while just 25% of girls do. Overall, 64% of children who begin primary school reach the last grade.
Almost 28% of children under the age of five in South Sudan are moderately or severely underweight. This compares with the 33% recorded in 2006. Unity state has the highest proportion of children suffering malnourishment (46%), while Central Equatoria has the lowest (17%).
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