(Adds fighting near oil region)

By Katharine Houreld and Denis Dumo

NAIROBI/JUBA Feb 17 (Reuters) - A South Sudanese minister has defected to the rebels, the second high-level resignation this week from the government, which is locked in a civil war that has displaced more than 3 million people.

Lieutenant General Gabriel Duop Lam, the minister of labour, sent a one-page letter saying he would join the rebellion of former vice president Riek Machar.

"I reaffirm my full allegiance and commitment to the ... wise leadership of H.E. Dr. Riek Machar," he wrote in the letter seen by Reuters on Friday.

Oil-rich South Sudan, the world's youngest nation, was plunged into civil war in 2013 after President Salva Kiir, an ethnic Dinka, fired Machar, his deputy and an ethnic Nuer.

The fighting that followed has increasingly followed ethnic lines, and in December the United Nations warned that it was setting the stage for genocide.

Government spokesman Michael Makuei Lueth, speaking at a news conference in Juba on Friday, confirmed Lam's defection, the second resignation of a senior figure in a matter of days.

Lieutenant General Thomas Cirillo Swaka, the well-respected deputy head of logistics, resigned from the military six days ago but did not say he was joining the rebels.

He cited massive human rights abuses by the military and rampant ethnic favouritism, charging that Kiir was filling key posts in the security forces with Dinka from his home area.

Many human rights groups have reported that the military has looted, raped and killed civilians.

Days after Swaka resigned, the government released a statement saying he had been implicated in a corruption investigation and had fled to avoid justice.

Fierce fighting continues between the government and the rebels around the town of Wau Shilluk, on the opposite side of the bank of the Nile from Malakal, a gateway to the country's oil fields.

Clashes have been ongoing since mid-January. Although there are no reliable casualty figures, the Red Cross, which operates a hospital near the fighting, said on its website that it had received "dozens" of wounded people in a single day.

On Thursday, the U.N. said it believed 20,000 people had fled into the bush to escape the fighting. (Reporting by Katharine Houreld and Denis Dumo; editing by Dominic Evans)