Serious clashes broke out early Sunday in the east of Chad between government troops and rebels hostile to President Idriss Deby Itno, both sides said.
"Fighting broke out at 7:00 am (0600 GMT). Our forces, who were pursuing the rebels, have caught up with them and surrounded them," Chadian Defence Minister Bichara Issa Djadallah said, adding: "We have taken several prisoners."
The number two on the rebel side confirmed that a "major battle began this morning between our forces and the government army around Hadjer Meram" around 150 kilometers (120 miles) northeast of the town of Am Timam.
"We have caught three battalions in a pincer movement, fighting is still going on," the deputy leader of the recently merged Union of Forces for Development and Democracy (UFDD), Acheikh Ibn Oumar told AFP.
"The government forces have already lost many men," he told AFP by satellite telephone.
Neither side gave more details of casualties in fighting round Hadjer Meram, which lies in mountainous territory less than 50 kilometres from the Sudanese frontier, but both described it as "serious".
Three rebel groups merged earlier this month to form the UFDD, which then resumed hostilities a week ago. The rebels successively occupied the towns of Goz Beida and Am Timan in the east of the country, before pulling back towards the border with Sudan and the Central African Republic.
On Friday, N'Djamena claimed more than 40 people - including 30 rebels, nine government soldiers and two civilians - had been killed in the clashes.
But UFDD head General Mohamat Nouri, a former defence minister, disputed that figure Saturday, claiming that 73 government soldiers and only two rebels had been killed. After the fighting a week earlier, Nouri told AFP that his forces did not plan to occupy towns. "What interests us is not taking towns, it is destroying enemy forces," he said.
Last April insurgents of the United Front for Change, now part of the UFDD, got as far as the edge of the capital before being driven back by the army. Deby's French-backed government accused Sudan of backing the insurgents.
N'Djamena has revived its claim that Sudan is involved, though the two countries officially reached a reconciliation in August after years of mutual accusations of destabilisation.
On Friday, Chad accused Sudan of bombing four places along the border and threatened reprisals. Khartoum also refutes these charges.
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