Somali government officials have denied allegations of fighting between the powerful Islamists and Ethiopian soldiers stationed in the country, local media reported.
In what would be the first violent confrontations between the Ethiopian soldiers and the Islamists, the latter said on Sunday they destroyed Ethiopian armoured vehicles and killed at least 50 soldiers.
But the government's assistant minister of defence, Salad Ali Jelle told local Shabelle Radio the clashes had never happened.
Ethiopia had long denied the presence of its troops in Somalia, but last month Prime Minister Meles Zenawi admitted troops were there "training" the weak interim government at its seat in the provincial capital Baidoa.
The international community has urged the two sides to engage in peace talks, but a crucial third round that would put in place a power sharing agreement collapsed last month, after the Islamist delegation said it would not meet as long as Ethiopian troops were in the country.
The Islamists, who have successfully captured most of south and central Somalia since they took the capital Mogadishu in June, have threatened to wage jihad, or holy war, on Ethiopian troops in the country.
Experts have said some 10 states, including Egypt, Iran and Uganda, are somehow involved in the Somali conflict, which could potentially escalate into a regional disaster.
Despite a UN arms embargo, Ethiopia's foe Eritrea has been charged with funnelling weapons to the Islamists.
Somalia has been without effective government since the 1991 ouster of dictator Mohammed Siad Barre by US-backed warlords.
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