Sudan says it has cut off diplomatic relations with Chad, blaming it for helping rebels from Darfur to launch an attack on Sudan's capital, Khartoum.
Both Chad and Jem rebels deny working together to launch the assault on the Khartoum suburb of Omdurman, which the rebels say they have taken control of.
The government said the rebel advance, the closest they have come to Khartoum, had been defeated.
An overnight curfew imposed on Khartoum has been extended indefinitely.
Sudanese President Omar al-Bashir made the announcement that his country was breaking off diplomatic ties with Chad on state television.
"These forces [behind the Omdurman attack] are all basically Chadian forces supported and prepared by Chad and they moved from Chad under the leadership of [rebel chief] Khalil Ibrahim," President Bashir said in his televised statement.
Sudanese state TV said Mr Ibrahim led Saturday's assault on Omdurman, across the River Nile from Khartoum. The report, monitored by the AP agency, said he was now in hiding somewhere in the suburb.
On Saturday, rebels from the Justice and Equality Movement (Jem) claimed to have taken the Wadi Saidna air force base about 10 miles (16 km) north of Khartoum, the suburb of Omdurman and to have entered the capital.
Founded by Darfuri Muslims loyal to Islamist leader Hassan al-Turabi
Led by lawyer Khalil Ibrahim Muhammad
Now said to have fragmented into several disparate groups
Sudan's Darfur rebels
There is now an uneasy calm in Khartoum, although there are reports that fighting is continuing in the west of the city, says the BBC's Amber Henshaw in Khartoum.
The curfew imposed in Khartoum overnight has been extended, at least for the rest of the day, a presidential adviser told the BBC.
Schools in the capital are closed and residents are being warned not to leave their homes until they hear it is safe to do so.
A rebel commander, Sulieman Sandal, told the BBC that the attack sent out a clear message that while there was no security in Darfur, there was none in Khartoum either.
Experts say Chad and Sudan are fighting a proxy war using each other's rebels to achieve their military objectives.
The Jem is one of several rebel groups fighting the government and pro-government Janjaweed militia in the western Darfur region since 2003 over alleged discrimination by the authorities in favour of Arabs.
The rebels have been involved in raids on government forces in the area before.