The government of the southern African country also said that up to 1,500 people had been injured in the fighting.

Diplomats say the battle is "vicious", with neither side taking many prisoners.

According to the radio station of Angola's rebel movement Unita, government troops are fleeing from the city and large amounts of arms and ammunition have been seized, including several Russian-built tanks.

The government garrison in the city has been cut off for several weeks and is being supplied by occasional air drops.

Fighting around Huambo has intensified after Unita brought in troop reinforcements from Bie province, which is around 165km away to the east of the city.

Unita radio also reported that its leader, Dr Jonas Savimbi, would address the nation on the search for a peaceful settlement of the conflict.

Since January there has been no running water or electricity in Huambo, which is home to 400,000 people, and many areas have been flattened by artillery shells.

The battle for the key city is seen as more symbolic than strategic.

The fighting in Huambo comes after the breakdown of a 1991 peace agreement which was aimed at ending 16 years of civil war in the former Portuguese colony.

Huambo is home to the Ovimbundu, the people who gave Mr Savimbi's Unita (National Union for the Total Independence of Angola) movement its main support.

Earlier, UN officials admitted defeat in their diplomatic attempts to halt renewed civil war in Angola, calling the outcome a "bitter disappointment".

Unita failed to attend UN-sponsored peace talks in the Ethiopian capital, Addis Ababa, last week, but proposed fresh talks in Geneva.

Local aid agencies have described the health situation in Angola as "dramatic" - with a child dying every two hours in the paediatric hospital in the capital Luanda.

Most of the main aid agencies have left the country after Unita launched an abortive coup attempt in Luanda last November.

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