Five Libyans were killed and scores wounded in clashes on Wednesday when ex-rebels linked to the army attacked Bani Walid, a former bastion of dictator Moamer Kadhafi, local sources said.
"Clashes today left four dead and 19 wounded in the ranks of Libya Shield," said a commander of the brigade which operates under the banner of the army.
A local official in Bani Walid, Massud al-Waer, told AFP the oasis town "was shelled from three fronts today and that one resident was killed".
Dozens of residents, he added, were wounded in the assault.
The attack comes exactly one year after former rebels declared the liberation of Bani Walid, which remained loyal to the long-time leader throughout the 2011 conflict that led to his ouster and death.
Many Libyans feel Bani Walid, 170 kilometres (110 miles) southeast of Tripoli, was never truly "liberated" and see it as a shelter for regime loyalists and criminal gangs.
The hilltop town came back into focus last month after the death of a former rebel from the city of Misrata who was credited with capturing Kadhafi and later kidnapped, allegedly tortured and shot in Bani Walid.
Acting on a national assembly's order to hunt down the perpetrators, army troops and brigades made up of ex-rebels encircled Bani Walid in early October and threatened to "purge" former regime remnants.