Uganda's rebels have formally written to the government asking for south Sudan's Vice-President Riek Machar to be sacked as a mediator at peace talks.
The rebels have until February 2007 to assemble in southern Sudan
The Lord's Resistance Army (LRA) asked for Kenya or South Africa to be considered as venues and new mediators.
An LRA spokesman told the BBC it was important to find a new venue as the rebels were being attacked in Sudan.
Meanwhile, the Ugandan army has threatened to shoot rebel fighters if they try to re-enter Uganda.
The talks have been seen as the best chance to end 20 years of conflict but progress has been slow.
Last week, the south Sudanese President Salva Kiir said the LRA fighters were not welcome in southern Sudan any more.
In response, the LRA's Martin Ojul wrote a letter, Uganda's Daily Monitor reports.
"We are respectfully communicating our formal position to you and the government delegation to the talks, essentially that the LRA delegation has discontinued its participation in the peace talks if Juba remains the venue and Dr Machar remains the mediator," he wrote.
He said a copy of the letter had been sent to x-Mozambican President Joaquim Chissano, the newly appointed United Nations envoy for Uganda at a meeting in Nairobi.
The talks began in south Sudan's capital, Juba, in July 2006 and have led to a truce.
Rebels are supposed to assemble in two areas by 28 February.
But LRA spokesman Obonyo Olweny said LRA fighters were unable to assembly at points to eventually disarm because of insecurity and because they were under attack by the Ugandan army.
"Fighting has been going on practically every day," he told the BBC's Network Africa programme.
Ugandan army spokesperson Maj Felix Kulaijye, however, blamed the rebels for the violence and refusing to go to assembly points.
"Vehicles are being ambushed; Sudanese are being killed," he told the BBC's Focus on Africa programme.
He said the government was still willing to continue negotiations in southern Sudan.
"The LRA chose Juba themselves," he said.
Mr Olweny said he expected Kenya's president, as head of the regional body Igad, to suggest an alternative venue soon.
"We hope for a peaceful resolution to the conflict and the peace process will continue and that we will avoid the necessary situation of going back to war," he said.
The BBC's Sarah Grainger in Uganda says after six months of talks, the talks have only reached item two on the agenda.
She says one serious sticking point has yet to be discussed - the issue of reconciliation and accountability.
LRA leader Joseph Kony and three of his top commanders are wanted on war crimes charges by the International Criminal Court and have indicated that no deal can be signed while warrants for their arrest remain in place.