Three Ethiopian soldiers and 10 residents of Buhoodle district in Somaliland were killed in a shoot-out after a dispute at a checkpoint.

Residents say Ethiopia troops regularly cross into southern and central Somalia and fight Islamists controlling their towns.

But it is believed to be the first time that they have sought to do this in the semi-autonomous region of Somaliland, which is generally seen as more stable than Somalia.

The conflict broke out after villagers expressed anger when soldiers searched several trucks and held them for several days.

"The Ethiopian forces seized some public transports vehicles from the city. Many people were angered and they clashed with the Ethiopian troops, stirring heavy fighting," Buhoodle commissioner Osman Yousef Mohamed said.

The forces had crossed from neighbouring Ethiopia into Somaliland, a self-declared republic, two weeks earlier.

Somaliland declared independence after the overthrow of Somali military ruler Siad Barre in 1991. Its independence has not been internationally recognised.