"I can confirm that Ibrahim Coulibaly was killed during fighting today," Defense Ministry spokesman Captain Alla Kouakou Leon said.

Coulibaly's 'Invisible Commando' insurgents had fought alongside what is now the Ivorian national army to topple Gbagbo, but had been accused of not meeting a deadline to lay down their arms and join the new army.

Ouattara ordered soldiers from all sides of the conflict back to barracks on Friday in an effort to restore stability to the world's top cocoa producer.

Coulibaly who last week pledged loyalty to Ouattara, said his 5,000 men were ready to join to new army. But he requested a meeting with Ouattara, but was told to disarm without condition.

Known as "IB," Coulibaly was a senior rebel commander in the 2002-03 rebellion before a bitter fallout with the rebel leadership led by current Ouattara's prime minister Guillaume Soro.

An Ivorian source who was mediating between Coulibaly and Ouattara's camp, and who asked not to be named, said Coulibaly and his bodyguards were killed after talks to end the row had been sabotaged by people who did not want him to meet Ouattara.

Fighting broke out in the Abidjan neighborhood of Abobo near the militia's headquarters as Ouattara's forces attacked the insurgents.

A spokesman for the militia had said that the group was in the process of disarmament and had asked its fighters to prepare to lay down their arms.