At least 10 Burkina Faso soldiers died and around 50 were wounded Monday in an assault in the northern city of Djibo, the army said.
The "terrorist attack" hit the 14th regiment at a base in Djibo, which has been under a jihadi blockade for three months, the army said.
"The preliminary toll is 10 soldiers fallen during fighting and about 50 injured and being treated," the statement said.
"On the enemy side, at least 18 bodies of terrorists have been counted during mopping-up operations which are still underway."
Air support had been called in to back up the operations.
A security source told AFP the pre-dawn raiders had fired shells at the Djibo barracks.
"Other strategic installations in the town were also targeted," the source added.
Djibo's population of some 30,000 has been cut off for three months with jihadis controlling the main roads after blowing up bridges.
An attack on a supply convoy heading for Djibo September 26 left 37 dead — 27 of them were soldiers. Seventy truck drivers are still missing.
The attack helped trigger the latest coup in Burkina just four days later, led by young army captain Ibrahim Traore.
He became interim president October 14, vowing to win back territory from the jihadis.
It was the west African nation's second coup in eight months.
"We are confronted with a security and humanitarian crisis without precedent," Traore said at his swearing-in.
"Our aims are none other than the reconquest of territory occupied by these hordes of terrorists. Burkina's existence is in danger."
Traore toppled Lieutenant-Colonel Paul-Henri Sandaogo Damiba, who had seized power in January, forcing out Burkina's last elected president, Roch Marc Christian Kabore.
The motive for both coups was anger at failures to stem a seven-year jihadi insurgency that has claimed thousands of lives and driven nearly 2 million people from their homes.