Officials and witnesses said the city had come under a new wave of attacks from the rebel National Liberation Forces (FNL).
The dawn attacks followed almost a week of clashes in and around the city that have claimed an estimated 200 lives.
After bursts of sustained gunfire, the army began firing shells at the attackers.
“It is the FNL that is attacking the city of Bujumbura again,” a local government official said.
“We are lying on the ground. There are a lot of them,” a local resident said by phone.
“We can hear drums and they are singing religious songs. It’s the FNL that is coming,” added the terrified resident.
Sunday’s renewed fighting came amid government claims that rebel attacks over the past week have been repelled and the rebels driven back at least 10 km from the capital.
The FNL, drawn from the ethnic Hutus, has been battling the government and its Tutsi dominated army since 1993.
Rated as the world’s third least developed country, Burundi has been wrecked by a continuous civil war between the Hutus and the Tutsis.
The continuing conflict has killed more than 300,000 people till now.