Security was stepped up in Juba, according to an AFP correspondent, as the clashes broke out 50 miles (100 kilometres) away in Lobonok, the first such fighting so close to the capital since the signing of the peace deal in September.
The National Salvation Front (NAS), formed by ex-general Thomas Cirillo Swaka in 2017 who called for the toppling of President Salva Kiir's government, said it had come under attack on Tuesday morning.
In a statement the NAS said it had killed eight "enemy soldiers", which could not be independently confirmed.
"NAS command at Lobonok is expecting more attacks," said the statement.
Lobonok is near Cirillo's home town and has long been a stronghold for the rebel group.
The last fighting in the area took place in June 2018.
"Since morning we didn't access our commanders on ground [in Lobonok] and we have no latest information there," Lul Ruai Koang, South Sudan's military spokesman told AFP.
However soldiers were deployed in Juba, carrying out more security checks than usual, said AFP's correspondent.
South Sudan's government in September reached a peace deal with the main opposition unit of the Sudan People's Liberation Movement but the NAS rejected the deal.
While peace has largely held across the country, fighting has continued between government troops and the NAS in the Central Equatoria region, particularly around the city of Yei.
The United Nations Mission in South Sudan (UNMISS) said earlier this month that civilians had been "deliberately and brutally targeted" in Central Equatoria since the agreement was inked in September.
At least 104 people had been killed in attacks on villages in the southern region, it said.
A roughly similar number of women and girls were raped or suffered other sexual violence between September and April, UNMISS said in its latest human rights report.
South Sudan descended into war in 2013 when President Salva Kiir accused his former deputy and fellow former rebel leader Riek Machar of plotting a coup.
The conflict has been marked by ethnic violence and brutal atrocities, and left about 380,000 dead while some four million have fled their homes.
The report identified government forces, fighters allied to Machar and rebel groups who did not sign the peace agreement, as responsible for atrocities in their quest to take territory in Central Equatoria.
Under the peace deal, Kiir agreed to set up a unity government with Machar, who is to return from exile.
But this new government, initially scheduled to take office on May 12, was postponed for six months.