The violence was concentrated in several districts in north Mogadishu, including Yaaqshiid, Kaaraan and Shibis.
African Union peacekeepers (AMISOM) were involved in the fighting on Thursday, with witnesses saying AMISOM artillery fire targeted Al Shabaab and Hizbul Islam rebel hideouts in different parts of Mogadishu.
According to medical sources, at least 25 people have been killed in this new round of violence and upwards of 70 others wounded. Most of the dead and wounded victims are civilians, the sources added.
Exodus
Hundreds of people have been fleeing their homes in north Mogadishu districts where the eruption of fresh violence has worsened a humanitarian crisis.
Families in districts such as Bondheere, Shibis and Kaaraan who have survived much of Mogadishu's wars have been fleeing their homes in huge numbers, witnesses and local sources said.
These districts have been relatively quiet in recent years, including during the time of the two-year Ethiopian army intervention in Mogadishu that ended in Jan. 2009.
Locals said it is the "largest number" of families fleeing war in these districts in nearly two decades.
'Dead foreign fighters'
Yusuf Indho Ade, a notorious former warlord, has told reporters that pro-government forces killed a number of 'foreign fighters' during recent battles in Mogadishu.
"We have three dead bodies…one is African [descent] and the other two appear to be from Pakistan or Afghanistan," he said, but did not provide any dead bodies for reporters to see.
Indho Ade was recently appointed as the interim government's state minister for defense.
Separately, Hizbul Islam spokesman Muse Abdi Arale rejected Indho Ade's claims and stated that 'foreign fighters' were not involved in the fighting.
In past remarks, Al Shabaab commanders have openly said that 'foreign fighters' from Muslim countries around the world are part of the insurgency aimed at toppling the country's Western-backed interim government.
The U.S. government has listed Al Shabaab as a terrorist organization with links to Al Qaeda.
Recently, the U.S. provided a weapons shipment to the beleaguered Somali interim government, led by President Sheikh Sharif. Al Shabaab insurgents have vowed to take the weapons from government hands by force.