Gunmen loyal to Somalia's religious group fought government forces on Saturday in a brief clash some 120 kms (74 miles) from the interim government's base, source said, heightening fears of all-out war.
There was no word on casualties in the first fighting between the two sides since religious group took Mogadishu from US-backed warlords on June 5, challenging the authority of President Abdullahi Yusuf's Western-backed government.
Government militia seized and set on fire two "technicals", heavily-armed pickup trucks, in the fighting in Qoryooley district, the source said.
"I confirm that the clash occurred," the Mogadishu-based source, who asked not to be named, told Reuters.
Government forces brought one of the technicals back to Baidoa, the government's temporary provincial base, witnesses in the town said.
The warning came as witnesses reported an incursion of Ethiopian troops into a second Somali town close to Baidoa, the seat of the country's toothless government, ostensibly to protect it from any advance by the religious group.
Residents in the town of Wajid, some 100 kilometres (60 miles) south of the Somali-Ethiopian border, said about 250 heavily-armed Ethiopian soldiers had arrived there early in the day.
"Ethiopian troops numbering about 250 arrived in Wajid town in Bakol region," said local resident Ahmed Issa. "They came in 30 armed vehicles and lorries," he added.
Ethiopia and the Somali government have denied any incursion by Addis Ababa's troops despite numerous eyewitness accounts.