Rebel fighters captured the southern Central African city of Bangassou on Sunday, weeks after they were accused of an attempted coup and ahead of partial results from a tense presidential election.
"The rebels control the town," Rosevel Pierre Louis, head of the UN peacekeeping force MINUSCA's regional office in the city, told AFP. "They are everywhere."
Government troops had "abandoned their position and are at our base", he added.
Earlier Sunday, MINUSCA tweeted that UN peacekeepers had been protecting the city and the bodies of five fighters had been found.
It also tweeted that the fighters attacking the city were allied to former president Francois Bozize.
Since December 19 a coalition of rebel groups, which control two thirds of the coup-prone country, has been waging an offensive initially aimed at disrupting elections that were nonetheless held on December 27.
President Faustin Archange Touadera's government has accused Bozize of fomenting an attempted coup — a charge he has denied.
Bangassou, which sits on the border with the Democratic Republic of Congo, is about 750 kilometres (470 miles) from the capital Bangui.
"The city has been under attack since 5.25 am (0425 GMT), and there are clashes everywhere," Louis earlier told AFP.
Bangassou's Bishop Aguirre confirmed that the clashes had started from 5 am, saying "there are gunshots and detonations around the city centre".
Bangassou frequent target
The landlocked country is one of the poorest in the world and among the most volatile, suffering coups and wars since independence from France in 1960.
In 2013, it spiralled once more into bloodshed when then-president Bozize, who had seized power in a coup a decade earlier, was ousted by a mostly Muslim coalition called the Seleka.
Bangassou has previously been the target of brutal assaults.
In 2017, "anti-balaka" militiamen, drawn mainly from Christian communities, attacked the city, slaughtering dozens of Muslim civilians as well as 12 UN peacekeepers.
Bangassou resident Ismail said Sunday's attack had been expected locally for around two weeks, and many had fled over the border to DR Congo.
"My children left, I stayed with my wife," Ismail told AFP as gunshots could be heard over the phone.
The attack came a day after armed groups waged a dawn assault on the town of Damara, around 70 kilometres (45 miles) north of the capital Bangui.
MINUSCA spokesman Vladimir Monteiro told AFP there had been an "incursion" in Damara on Saturday, but Central African soldiers had "intervened and the armed groups fled".
He added that MINUSCA, which has 11,500 peacekeeping troops in the country, had sent patrols to the town.
The UN force was not yet able to provide details on the number of dead and wounded in either the Bangassou or Damara attacks.
Touadera is the favourite to win last weekend's election, which opposition groups have called to be annulled because — among other reasons — voting only took place in a fraction of the country.
The definitive results from the first round are not expected before January 18, and if there is no outright winner a runoff will be held on February 14.