Pro-government armed groups in Mali seized the northern town of Menaka from Tuareg separatists on Monday during fierce fighting, a spokesman for the group and a resident said.
The clashes come after months of relative calm and risk derailing a fragile United Nations peace process that aims to settle the future of Mali's desert north, known by separatists as Azawad.
The vast region has been hit by insurgencies over the last five decades, with rebels fighting for independence or a form of self-rule from the government in the south.
The most recent uprising in 2012 came when Tuareg rebels formed an alliance with Islamist militants to briefly seize control of the northern two-thirds of Mali.
Militants from the Gatia pro-government group and the Arab Azawad Movement (MAA), a faction of a northern Arab militia also favorable to the government camp, attacked the town on Monday morning, a Gatia spokesman said.
The raid was in retaliation for attacks on the group's supporters, including the lynching of several women, he said.
Menaka lies around 200 km (125 miles) east of Gao, the largest city in northern Mali, close to the border with Niger.
It had been controlled by the main Tuareg rebel group, the National Movement for the Liberation of Azawad (MNLA).
"At this hour, the MNLA flag is no longer flying above Menaka," Gatia spokesman Medhi Ag Almoubareck said, later adding that fighting continued after nightfall.
Ten MNLA fighters were killed in the clashes and another seven were taken prisoner, while Gatia had recorded no losses, he said. There was no immediate independent verification of the claims.
For months, U.N. and Algerian mediators have been thrashing out a peace proposal that aims to prevent future revolts by Tuareg-led insurgents.
After weeks of dithering, a coalition of rebels said late on Sunday they would give initial approval to a long-delayed U.N. peace proposal, following similar pledges from other armed groups and the government.
An MNLA spokesman confirmed the clashes and in a statement on behalf of the Coordination of Azawad Movements (CMA), the umbrella movement for the various separatists groups, he accused the Malian army of participating in the attack.
"The Malian government will bear full responsibility for the consequences of such attacks," the statement read.
Claiming it was "surprised" by the violence "between certain armed groups" in its own statement late on Monday, the government called for all parties to respect previous ceasefire agreements.