Residents in the Somali port of Kismayo says fighters from the Islamist group that controls the city, al-Shabab, are pulling out.
African Union troops, which back the Somali government, have been slowly advancing towards the port for months.
Kismayo is al-Shabab's main base in its fight against the Somali government, which has been converging on the town with African Union (AU) soldiers.
Residents say militants have been leaving on buses and trucks, taking heavy equipment with them.
But the al-Qaeda-affiliated group denies the reports, saying they have fought off AU forces.
Spokesperson Muhammad Usman Arus told the BBC that al-Shabab had killed around 100 Kenyan and Somali troops and pushed them back from Kismayo.
"We are in Kismayo - this is a propaganda war. The Kenyan and Somali forces have already broken off and gone back to their positions."