Clashes between Military forces of Puntland state and the breakaway Somaliland erupted on Tuesday morning in Sool region.
The fighting which is reported to be ongoing flared up in a disputed town, Tukaraq about 90 km from Garowe which is an administrative capital of Puntland.
Puntland Minister for Information, Abdi Ali Hirsi Qarjab accused Somaliland of "aggression" saying Somaliland forces raided bases manned by Puntland troops.
"Early hours of Tuesday, Somaliland forces invaded our troop near Tukaraq town. Our forces are wording off the attackers," said Qarjab.
He said the fighting is ongoing in and around the town with hundreds of residents in the area started fleeing their homes.
"The fighting is continuing in and around town. The aggressors have already displaced almost the entire population of the town as they using heavy artillery weapons against the civilians in the town," he noted.
Somaliland chief of armed forces, Nuh Ismail Tani has dismissed the blames by Puntland minister, saying Somaliland forces who were in full control of Tukaraq town (in the recent month) came under attack.
"Puntland attacked our forces in Tukaraq town today, the battle is going on," said Tani.
The two warring sides at the border town did not report any casualties and the fighting is reportedly escalating.
Somaliland and Puntland both claim ownership of Sool and Sanaag regions that lie between them.
The fighting comes as the UN envoy to Somalia, Michael Keating is carrying out efforts to ease the tension between the two regional states.
Keating held talks with Garowe and Hargeisa local authorities on the intensifying tensions in Tukaraq town.
Somaliland declared independence from the rest of Somalia in May 1991.
But it has not yet achieved any formal international recognition as a sovereign state.