"We lost three soldiers in battle and the other side left more dead bodies behind. I do not know their exact number."
The 4,300-strong AU peacekeeping force was visible on the streets of Mogadishu on Sunday, but an AU spokesman denied engaging rebel forces in direct combat.
Major Barigye Bahoku told Al Jazeera that his forces were involved instead in what he called "a show of force".
"We have not been engaged [in fighting]," he said.
"We moved around in our convoy, with our equipment. We are not supposed to be confined ... rather we are supposed to provide security for all of Mogadishu.
"So we moved in, we showed force and we went back to the base and the government forces are continuing with their work."
Mohamed Sheikh Nor, a journalist in Mogadishu, told Al Jazeera that the fighting is some of the worst in recent days.
"Somali government officials have been requesting the AU peacekeeping force in Somalia, especially in the capital Mogadishu, to be part of the fighting against the opposition fighters.
"But the AU, up until now, has been declining to comment" on why they have not accepted the government's request, he said.
"Today, it seems they have accepted and they are part of the fighting."
The peacekeepers - from Burundi and Uganda - generally try to avoid being drawn into the conflict in order to preserve their neutrality.
Their mandate includes the defence of the capital's port, airport and key government buildings.
An Al Jazeera correspondent, speaking from the frontline in Mogadishu, said on Sunday he had seen "several bodies" and that the fighting was still raging.
Fighters belonging to al-Shabab and other anti-government groups control swathes of southern and central Somalia and have boxed in government troops and the AU force into a few blocks of Mogadishu.
'Smell of blood'
Clashes on Saturday between the fighters and Somali troops killed at least 20 people.
"The streets are scary and smell of blood today," Ali Musa, an ambulance driver, told the Reuters news agency.
Among the dead in the heaviest fighting for a week was a senior police officer and a foreign fighter, residents said.
The government showed the body of a fighter it said was an Afghan national fighting with Hizbul Islam, an umbrella opposition group led by Sheikh Hassan Dahir Aweys.
Farhan Arsanyo, a military spokesman, told Reuters: "He was an Afghan senior commander with the anti-peace men fighting the government. He has his country's passport."
"We captured others from Pakistan, Afghanistan and Yemen, and we shall display them soon," Arsanyo added.
Sharif Ahmed, Somalia's president, is struggling to take control over the Horn of Africa nation from the fighters bent on overthrowing his western-backed government.