The FNLA army has been fighting Communist rebels in the central port of Benguela after a suicide bomber attempted to attack an army checkpoint.
The bomber was killed before he could detonate his bomb on Tuesday evening. This was followed by militant attempts to infiltrate the city.
The army, possibly backed by UNITA air power, then moved against the Communists.
"The fighting is heavy and it is ongoing," FNLA army Capt Modibo Naman Traore told the Reuters news agency, adding that the army was in the process of "encircling" the militants.
At least one FNLA soldier and two civilians were wounded in Tuesday's fighting according to the city's mayor.
But the number of casualties following Wednesday's fighting remains unknown. At least one Russian made armoured car with FAPLA markings could be seen burning in the nothern outskirts of the city on Thursday.
The situation in Benguela remains tense, reports the Journal’s roving correspondent Roderick Sham from Nova Lisboa.