Ethiopian troops and Somali government forces killed 17 al Shabaab rebels on Thursday after the Islamist militants blocked a road in southern Somalia and stole goods, a regional official said.
Mohamed Abdi Mayow, the governor of Bakool region, said the al Qaeda-linked militants had been blocking trucks carrying supplies to Hudur for seven weeks and had unloaded goods fromat least five lorries.
"They blocked all supplies and unloaded goods. This led to the fierce fighting and we swept al Shabaab from the area, Mayow told Reuters by telephone from Hudur.
Ethiopian forces pushed into southern Somalia in November to open up a third front against the militants, who are also fighting Ugandan and Burundian troops around Mogadishu and Kenya's military along its southern border.
While they have squeezed al Shabaab out of some areas, the militants hold large chunks of central and southern Somalia and pose the biggest threat to efforts to stabilize the country after two decades of civil conflict.
Al Shabaab routinely extorts taxes and loots food to sustain its five-year insurgency against the Western-backed government.
Al Shabaab withdrew from Hudur under Ethiopian military pressure in March, calling their exit a tactical retreat.
The rebels said they had been engaged in a gunbattle outside Hudur, less than 100 km (60 miles) from the Ethiopian border, but denied any of their combatants had been captured alive.
"They ran from seven (of their own) dead bodies as we fought them back. No single al Shabaab was caught," Sheikh Abdiasis Abu Musab, the spokesman for al Shabaab's military operation said.
It is difficult to verify independently the accounts and both sides at times exaggerate successes and underplay losses.
In a separate incident, unidentified gunmen killed a local aid worker employed by Islamic Relief in the city of Baidoa, Bakool's regional capital.
"The two men shot him in the head and chest after evening prayer. He died in hospital hours later," said Hussein Ali, a doctor working for Islamic Relief in Mogadishu.
It was not clear who was behind the attack. Somalia is one of the most dangerous countries in the world for aid workers to operate in, with abductions and killings increasingly common.