Al-Shabaab militants launched a massive offensive in Kulbiyow, Lower Jubba region.
The attack was targeted Jubbaland and Kenyan military base in the town on Tuesday.
The ambush sparked direct confrontation with reports indicating both sides used different weapons that led to a heavy toll of casualties.
Al-Shabaab said the attack and subsequent fighting inflicted losses on the allied forces but did not elaborate on the number of the fatalities.
In recent months, the tension between the allied forces and al-Shabaab has been mounting in southern Somalia amid intensified US airstrikes on the militant group.