Troops remained deployed around the home of South Sudan's powerful former army chief Paul Malong on Sunday in a dispute over the fate of his 30 bodyguards, an army spokesman told AFP.

The standoff began on Friday evening when more than 100 soldiers surrounded his residence in central Juba, South Sudan's capital, in a move which prompted people to flee to their homes for fear the standoff would erupt into clashes.

Gen Malong is a hardline ethnic nationalist whose dismissal in May by President Salva Kiir had sparked fears of a major clash between supporters and troops loyal to the president, though that never materialised.

But by Sunday morning, after a tense but uneventful 36 hours, people could be seen venturing out for early-morning prayers even though troops remained in the streets around his home in the central Hai Amarat neighbourhood, an AFP correspondent said.

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Army spokesman Brigadier General Lul Ruai said the soldiers were in place because of a "small misunderstanding" with Gen Malong, who had failed to comply with an order given to him on Friday that he release most of his government-appointed bodyguards to return to their former duties.

"That notification did not go down well with him, he didn't comply with the order, and as a result we establish a limited presence of security personnel around his residence to ensure that elements do not take advantage of the misunderstanding," he told AFP.

"So we are there for a limited period and once an amicable solution is reached, this limited security force deployed around him will be removed," Gen Ruai said, indicating that government officials were negotiating with him to ensure the situation was "resolved peacefully".

Since Gen Malong was no longer chief of staff, he no longer required such a large contingent of bodyguards, Gen Ruai said, indicating that he had been allowed to retain just three of them.

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The request was made just four days after President Kiir signed an order, a copy of which was obtained by AFP, authorising the arrest and disarming of Gen Malong's bodyguards and the removal of any other arms in his possession.

It also said any resistance "must be met with reasonable force".

Gen Malong, who belongs to President Kiir's majority Dinka community, is widely regarded as the mastermind behind fighting that erupted in Juba in July 2016 that left hundreds of people dead.

The clashes also crushed hopes of a power-sharing government between President Kiir and Dr Riek Machar, his former deputy turned rebel chief, who is a member of the Nuer community.

South Sudan has been gripped by a brutal civil war that has lasted nearly four years, involving the country's two largest ethnic groups, the Dinka and the Nuer, who have a history of bloody rivalry.

The general, who is under house arrest, was one of three senior South Sudan officials who was hit by US sanctions in September on charges of fomenting and profiting from the civil war.

Canada also followed suit on Friday, with Foreign Minister Chrystia Freeland saying the sanctions related to individuals "linked to human rights violations and corruption".