1 January 2012 Last updated at 08:34 GMT
Six-thousand fighters from the Lou Nuer ethnic group in South Sudan have attacked the town of Pibor, home to the rival Murle group, the military says.
A hospital and other parts of the town have been set alight, Colonel Philip Aguer told the BBC.
United Nations troops and the South Sudanese army were unable to prevent the attack, which follows a wave of violence linked to cattle rustling.
Tens of thousands of people had fled Pibor, fearing an assault.
The UN deployed more combat troops to defend the town, following reports that the armed Lou Nuer men were approaching.
However, the 800 soldiers who were said to be present in the Pibor were completely outnumbered by the attackers.
There are no details of casualties but almost all of the civilians in the town had fled.
Fighters from the Lou Nuer ethnic group have been marching through Jonglei state in recent weeks setting fire to homes and seizing livestock.
The entire town of Lukangol was burnt to the ground last week. About 20,000 civilians managed to flee before the attack, but dozens were killed on both sides.
About 1,000 people have been killed in Jonglei in recent months, during inter-ethnic fighting, triggered by the cattle raids.
The governor of Jonglei state and the vice-president of South Sudan have been trying to mediate between the rival ethnic groups.
The BBC East Africa Correspondent, Will Ross, says the Lou Nuer and Murle communities are now basically at war with each other.
It is not clear what can be done to ensure that there is not massive loss of life, he says.
Tribal violence over cattle rustling has been going on for years in the region, but reprisal attacks are now at an alarming level, our correspondent adds.
South Sudan became independent on 9 July 2011 following decades of civil war with the north.
One legacy of the conflict is that the region is still flooded with weapons.
These are now being used in tribal power-struggles, which often focus on cattle because of the central role they play in many South Sudanese communities.
So far, the South Sudanese authorities appear unable to make any progress in tackling the problem.