UNITED NATIONS/WASHINGTON (Reuters) - Amid warnings that ethnic violence in South Sudan risks spiraling into genocide, the United States expects to impose sanctions on individuals on both sides of the conflict in the coming days, U.S. and other diplomatic sources said on Monday.

The sources, who spoke to Reuters on condition of anonymity, said that the sanctions would involve a ban on travel to the United States and the freezing of any assets under U.S. authority. People on both the rebel and government sides will be targeted, the sources added, without disclosing names.

"In the coming days," a U.S. official said about the expected timing of the move. The other sources confirmed that the United States had already made a decision to sanction several individuals and it was now a question of timing.

The fact that Washington is preparing U.S. sanctions against a country the United States helped create and has supported with large amounts of aid shows how frustrated President Barack Obama's administration has become with South Sudan's leaders.

News of an imminent U.S. move came as Secretary of State John Kerry threatened sanctions against South Sudan rebel leader Riek Machar if he spurned peace negotiations, while government forces battled for control of the northern oil town of Bentiu.

Thousands of people have been killed and more than 1 million have fled their homes since fighting erupted in the world's newest nation in December between troops backing President Salva Kiir and soldiers loyal to his sacked deputy, Machar.

U.N. peacekeepers have been protecting tens of thousands of civilians who sought refuge at U.N. bases for months.

On Friday top U.N. officials said the violence could become genocide, with the country's leaders locked in a personal power struggle. Members of the U.N. Security Council are also considering targeted U.N. measures in addition to any unilateral steps Washington takes on South Sudan.

Under the terms of a deal signed in Addis Ababa, the two sides in the conflict were to consider a truce on Monday to allow civilians to move to places of safety and plant crops.

ETHNIC MASSACRES

The humanitarian aid organization Oxfam welcomed the news that the United States is about to impose sanctions on people linked to the fighting in the world's youngest country.

"After much delay, this is an important first step in demonstrating U.S. commitment to ending the violence that has killed thousands and left 5 million people - half of South Sudan's population - in need of humanitarian assistance," said Noah Gottschalk, senior humanitarian policy advisor at Oxfam America.

"But engagement from the Obama administration cannot begin and end with these sanctions," he added. "In the coming days, the U.S. must pull no punches, and swiftly take further steps in keeping with the gravity of the conflict."

The sources for this article said nothing of any possible further moves after the initial round of names are announced.

The sources declined to say who would be sanctioned because they feared those targeted would immediately start moving assets out of the reach of U.S. authorities.

Fears of a descent into genocide grew after the United Nations said South Sudan rebels had massacred hundreds of civilians in Bentiu last month. Days later, residents of Bor, a predominantly Dinka town, attacked members of the Nuer ethnic group camped in a U.N. base.

Oil output, South Sudan's economic lifeline, has been cut by a third to about 160,000 barrels per day since fighting began.

The United States began considering targeted sanctions against the two sides in the conflict in January due to the failure of the country's leaders to take steps to end the crisis.

Largely Christian South Sudan gained independence from predominantly Muslim Sudan in 2011 after a referendum was held in keeping with a 2005 U.S.-backed peace deal that ended a north-south civil war that left millions dead.