The two sides had been negotiating over the makeup of a transitional government following the military's ouster of President Omar al-Bashir in April, after mass protests against his autocratic rule.
In early April, Sudan's military establishment deposed al-Bashir following months of popular demonstrations against his 30-year rule.
The SPA said Monday's action against the sit-in amounted to a "bloody massacre".
United Nations spokesman Stephane Dujarric said it was clear they had used excessive force on civilians, while British Foreign Minister Jeremy Hunt called the dispersal "outrageous".
"Responsibility falls on the TMC", US embassy in Sudan said. However, the Transitional Council said the military "didn't disperse the sit-in by force" but focused on a gathering in a nearby "dangerous area".
The United States on Monday condemned Sudanese military leaders' "brutal" crackdown on protesters and said that better relations with Washington would be contingent on moving toward a civilian-led government.
In separate statements, the TMC and the AMC announced that they were both suspending all negotiations.
The seven-member Transitional Military Council (TMC) is led by Lt-Gen Abdel Fattah Abdelrahman Burhan. The security forces have betrayed the Sudanese people, from security to police and army, as well as Rapid Security Forces.
Guterres said in a statement that he was "alarmed" by reports that security forces had opened fire inside a hospital in Khartoum.
Protesters rejected the move because it would put the military in charge of running the election and reiterated their call for three years of civilian-led authority.More news: Real Madrid sign star striker for six seasons
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Protesters have remained camped out in front of Khartoum's army headquarters to pressure the generals to yield power.
"They started attacking protesters with sticks and bullets, and minutes later they started firing large quantities of stun grenades and live bullets at the picket square", the Sudanese Professionals Association said in its statement.
Talks between the DFC and allied organizations, and the TMC, broke down after the military leaders refused a deal that would allow civilians to hold a majority in a transitional government meant to lead to national elections.
Moussa Faki, the head of the African Union Commission, urged "an immediate and transparent investigation in order to hold all those responsible accountable".
Sudan's public prosecutor yesterday ordered an investigation into the violence, state news agency SUNA said.
The military, in turn, said that the operation was not directed against the demonstrators, but for apprehending the criminals who had leaked into the ranks of the protesters.
The SPA called Monday for the Sudanese people to take part in "total civil disobedience".
For Saudi Arabia and the UAE, preserving "stability" in Sudan via support for the TMC could become an expensive commitment.
Protesters driven out of the site outside the defense ministry continued to demonstrate and erect barricades in the streets of Khartoum and the neighboring city of Omdurman.
The military's role in ousting Omar al-Bashir has raised fears among many Sudanese that their country could follow a similar path to neighbouring Egypt after its 2011 uprising. If such lethal raids on protestors become more commonplace in Sudan, a rising death toll could leave more protestors concluding that it is naive to count on non-violent tactics and that only through violence can revolutionary change be achieved.