"There is heavy fighting going on at several bases in Afgoye district and one of the bases was attacked with a car loaded with explosives," Abdulakir Ahmed, a local security official, told AFP.
A Shabaab statement said the group had recaptured the town, which it evacuated in May 2012 after coming under attack from the Somali army and African Union peacekeepers.
"The Mujahedeen fighters have secured control of Afgoye town after heavy fighting and they put up the Islamic flag over the enemy bases," said the statement.
There was no independent confirmation of the reported capture of the town.
Also Read
Residents said the target of the bomb attack was the local police station.
"There was a suicide car bomb attack targeting the police station and heavy fighting is going on," said resident Amin Moalim.
He said the town had been taken by surprise and "people are hiding in their houses and those who stayed outside have fled."
"I saw wounded civilians and Somali soldiers as well," he added. "We don't know who is controlling the city so far because heavy exchange of gunfire is going on."
Disclaimer: No Business Standard Journalist was involved in creation of this content