Insurgents launched a fresh attack on the Malian army in the rebel bastion of Kidal on Monday, the military told AFP, in renewed fighting since the breakdown of peace talks.
The National Movement for the Liberation of Azawad (MNLA), which is fighting for autonomy in northern Mali, ambushed soldiers at a central bank, the scene of a fierce firefight on Sunday night, a senior Malian army officer told AFP.
"Our position at the bank in Kidal was attacked early this morning by MNLA troops. We responded and we have brought the situation under control," the officer said.
Panicked residents ran back into their homes in the busy downtown area as gunshots rang out around 7:00 am (0700 GMT)," an aide of the regional governor Adama Kamissoko said.
"We do not know what is happening at the moment. But this is the same place as on Sunday," he told AFP.
The MNLA, the main Tuareg group involved in peace talks between rebels and the government which broke down on Thursday, said three of its fighters had been wounded during Sunday's gunbattle, which lasted more than an hour.
The clash followed two attacks by militants on soldiers since Tuareg rebels claiming autonomy for northern Mali pulled out of the talks last Thursday, dealing a blow to hopes of a durable peace in the troubled west African nation.
Kamissoko's office said international troops and UN peacekeeping forces already present in the city had been deployed after the attack to protect the town hall, where the governor lives and works.
The MNLA accused Mali troops of "flagrant aggression", saying in a statement that its chief, who was badly injured, had been leaving his vehicle with his hands raised when the army fired.
That incident led to exchanges of fire as the rest of the unit responded, the statement added.
Mali has suffered a series of attacks claimed by Islamist insurgents since France launched a military operation in January against Al-Qaeda-linked groups occupying the north of the country.
Four suicide bombers blew up their car at a military barracks in the desert city of Timbuktu on Saturday, killing two civilians and wounding six troops, less than 24 hours after militants threw grenades at the army in Kidal, wounding two soldiers.
But no Islamist group has claimed any of the recent attacks, with the spotlight falling on the MNLA.
The group took control of Kidal in February after the French-led military operation ousted Al-Qaeda-linked fighters who had piggybacked on the latest Tuareg rebellion to seize most of northern Mali.
The Malian authorities reclaimed the city after signing a ceasefire deal with the MNLA but the situation has remained tense.