Aides to Dahir Awyes confirmed to Al Jazeera that reports of his death were false.
Dahir Aweys has been accused by the United States and United Nations of having links to al-Qaeda.
The local Elman Peace and Human Rights Organisation said that 123 people had been killed in the fighting, one of the worst flare-ups of violence this year in Somalia.
Scores of bodies lay in the streets of Wabho town after fighters from the al-Shabaab and Hizbul Islam groups fought against the Ahla Sunna Waljamaca group for territorial control, witnesses said.
Some residents of Wabho and a fighter from Hizbul Islam said Dahir Aweys was injured during the clashes and had been taken to hospital in El Bur.
Neither pro- nor anti-government forces had won control of Wabho, locals said.
Aid agencies say three million people need urgent food aid in one of the world's worst humanitarian crises as a consequence of the fighting.
In Mogadishu, al-Shabaab fighters have been battling the security forces of Sharif Ahmed, the president, with one of the group's primary objectives being the enforcement of their interpretation of sharia, or Islamic law, in the country.
In the country's centre, groups have been fighting all year, with towns changing hands regularly.