A heavy gunfight between Somali military and Al-Shabaab fighters took place on Saturday morning in Bar-sanguni military base which lies some 40 kilometres (24 miles) north of the regional capital Kismayo.
The battle broke out following an ambush attack against army base where U.S troops and Somali commandos are stationed., according to the sources.
Several witnesses in nearby villages reported the two sides exchanged heavy and light weaponry during the fighting which raged on for hours. The details of the casualties on both parties remained sketchy.
The Shabaab has been fighting to overthrow the internationally-backed government in Mogadishu for over a decade.
Despite losing towns and territory in recent years the group continues to carry out regular bombings and armed raids on government, security and civilian targets in the capital and elsewhere.