Islamist insurgents have seized control of a key town in northern Mozambique, close to where foreign companies are working on a $60bn (£52bn) natural gas project.
The militants staged an overnight attack on Mocimboa de Praia, taking a military base and raising their flag, police said.
The army and police have launched a counter-offensive, police added.
This is the first time Mozambican jihadists have attacked a major town.
They usually attack villages and farms.
Panicked residents said the fighters had blocked all exit routes, and they could not leave the town.
“They are taking residents to the mosque and locking them there,” the privately owned Moz24h website quoted a resident as saying.
Hundreds have been killed and thousands displaced during the three-year insurgency in Cabo Delgado.