Chad's army says it has killed several hundred rebels in fierce fighting near the eastern border, which shattered a month-long ceasefire.
The claims have not been independently verified but a rebel leader said 17 of his men were dead, along with 100 government soldiers.
The clashes were near the border with Sudan's Darfur region, in an area where 4,000 EU peacekeepers are to be sent.
The fighting follows months of relative calm and a Libya-brokered ceasefire.
There are now fears that security in the area will deteriorate further, says the BBC's Stephanie Hancock in Chad's capital, Ndjamena.
Heavy gunfire
Thomas Merkolbach of the Red Cross told the BBC that about 60 people had been treated at the hospital in Abeche, where he is working.
The combat, which is reported to have been very heavy, took place near the small towns of Forchana and Hadjer Hadid, 70 km (45 miles) east of Abeche.
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Aid workers based in Forchana reported hearing both machine gun and heavy arms fire for much of Monday morning.
The army attacked a rebel column advancing towards Abeche, a military spokesman said in a statement broadcast on radio and television.
"The security and defence forces carried out a total and definitive annihilation of this column," the spokesman said.
"The partial [rebel] toll is around 50 vehicles seized, around 40 vehicles destroyed, several hundred dead and several prisoners of war."
No indication of government casualties was given but a leader of the Union Forces for Democracy and Development (UFDD) rebel group said only 17 rebels had been killed.
"We have killed more than 100 from among the army ranks," Abakar Tollimi, the UFDD's secretary general, told the AFP news agency.
The head of the UFDD, Mahamat Nouri, told the BBC the Chadian army initiated the fighting.
A French military air base in Abeche has been turned into an emergency hospital to treat wounded Chadian soldiers, Reuters news agency said.
Volatile border
The rebels, who are fighting to overthrow President Idriss Deby, said the government has failed to honour the peace deal and announced at the weekend they would break the ceasefire.
The government said the UFDD and another rebel group, the Rally of Forces for Change (RFC), broke the peace accord by crossing into Chad from Sudan.
Eastern Chad is currently preparing to receive 4,000 EU troops early next year.
They will be charged with protecting the volatile border with Sudan's Darfur region.
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