A rebel spokesman indicated that there would be no imminent truce unless the government freed a group of top allies.
The government is currently holding 11 of Machar's allies, many of them senior figures and former ministers.
Kiir, however, appears to have so far resisted the demands and maintains the detainees should be put on trial for their role in what he says was an attempted coup.
South Sudan's government and rebels were locked in fierce battles across the country as peace talks in Ethiopia appeared to flounder.
A rebel spokesman indicated that there would be no imminent truce in the country unless the government freed a group of top allies who were detained after the fighting began more than three week ago.
The two sides have been holding peace talks in the Ethiopian capital Addis Ababa, but the rebel delegation signalled that the chances of an immediate truce being agreed to was slim because the anti-government side wanted its detained allies freed by Juba.
"Our colleagues must be released so that they come and participate," rebel spokesman Yohanis Musa Pauk told reporters in Addis Ababa.
"You cannot go to negotiations while there are some people being detained. You need to release them so that they now have a positive role in the negotiations.
"We are just waiting for the release of our detainees, when they release them very soon we will sign the cessation of hostilities agreement," he added.
The government is currently holding 11 of Machar's allies, many of them senior figures and former ministers, but has been under pressure from Igad-- the East African regional bloc which is trying to broker a truce -- as well as Western diplomats to release them as a goodwill gesture.
The government, however, appears to have so far resisted the demands and maintains the detainees should be put on trial for their role in what the president says was an attempted coup.
The rebel spokesman accused the government of "lying" to Igad over the detainees by sending mixed signals, and asserted that the rebel side was acting in good faith.
"We came here for peace, not just for talks, we came here to sign an agreement," he said.
Military officials officials from both sides meanwhile said that a major battle for control of Bor, capital of Jonglei State and situated just north of the capital Juba, was still raging.
Fighting was also taking place in the oil-producing Upper Nile State, while the rebels said more troops previously based in Juba had defected from the government side and could launch an assault on the capital.
"Our forces are coordinating themselves," rebel spokesman Moses Ruai Lat said, adding anti-government fighters were preparing to strike at Juba and Malakal, capital of Upper Nile State.
The spokesman for the national army, Philip Aguer, only confirmed that fighting continued to rage around Bor.
The fighting began on December 15 as a clash between army units loyal to South Sudan's President Salva Kiir and those loyal to ex-vice president Riek Machar, and has escalated into war between government troops and a loose alliance of ethnic militia forces and mutinous army commanders.
Thousands of people have already been killed, UN officials say, while more than 200,000 have fled their homes -- many of them seeking protection from overstretched UN peacekeepers amid a wave of ethnic violence pitting members of Kiir's Dinka tribe against Machar's Nuer tribe.
The humanitarian situation in South Sudan has continued to deteriorate.
Atrocities have been committed by both sides, and the UN has said it will investigate crimes against humanity thought to have been committed.
"We've got an unfolding humanitarian catastrophe... on top of a situation where we were already aiming to help 3.1 million in South Sudan," Lanzer added.
"It is a really critical period for the country. Hostilities just have to end."
According to the latest UN figures, 200,000 people have been displaced by the fighting, with more than 30,000 fleeing the country altogether, mainly to neighbouring Uganda.