The Karenni Nationalities Defense Force (KNDF) this week ambushed junta forces trying to retake Mobye town in Pekon Township, southern Shan State, on the Karenni State border.
The junta responded with airstrikes, according to residents.
Regime forces advanced into KNDF-held Mobye in early December. The KNDF is a coalition of armed groups in Karenni State formed after the 2021 coup.
Banya Khung Aung, spokesman for the Interim Executive Council of Karenni State, said: “The clashes began on Tuesday and continued on Wednesday as the KNDF and its allies advanced on the route to Pekon. Airstrikes lasted throughout Wednesday.”
He said the junta had failed to retake Mobye and the KNDF had launched a surprise attack on junta troops on the road to Pekon.
Mobye is between the Karenni capital, Loikaw, and southern Shan State, which are both controlled by the junta. It is about 200km east of Naypyitaw.
The junta has reportedly suffered heavy losses during its two-month-long offensive to retake Mobye, using new conscripts and the allied Pa-O National Army.
Pekon Township, about 40km from Loikaw, is home to Military Operations Commands 2 and 7.
After attacks on junta targets, Karenni anti-regime forces claimed control over most of Pekon Township, including Mobye, early last year.