The hours-long fighting in the eastern coastal city of Darna erupted after gunmen opened fire on Nasser Akr, an al-Qaeda-inspired militant once held in the United Kingdom on terrorism charges. The 55-year-old veteran jihadi, who fought in Afghanistan, was killed along with his aide.
Akr's group known as Shura Council of Darna's Jihadis announced his death in a statement Wednesday, blaming it on Islamic State militants.
The ensuing clashes killed at least nine IS militants and two from the Shura Council, including Salem Derbi, the commander of the so-called Abu Salem Brigade, which has history of enmity with the IS affiliate.
The IS group in Libya is a mixture of homegrown militants, former al-Qaida affiliates and foreign nationals who were trained in Syria and sent to join IS in Libya.
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The clashes in Darna mirrored regional rivalry between the two groups, which are also fighting against one another in Syria.
"Now we are searching for the Wali," the Brigade member added. He was referring to a Yemeni militant sent from Syria to fight for Libya's IS affiliate and known with his nom de guerre Abu al-Baraa el-Azdia.
The member added that many of those killed are foreign nationals.
The slain Abu Salem Brigade commander, Derbi, belonged to a generation of Islamic militants who turned Darna into a jihadist stronghold in the 1980s and 1990s during an insurgency against longtime dictator Moammar Gadhafi.
Darna was also the main source of Libyan jihadis and suicide bombers who joined the insurgency in Iraq after the US-led invasion in 2003. Entire brigades of Darna natives have also been fighting in Syria's civil war.