The fighting killed 14 rebels and four soldiers in Fizi, a region of South Kivu, a mineral-rich province which is prone to ethnic tensions, the sources said.
The unrest is another front by rebels opposed to President Joseph Kabila as the poverty-stricken Democratic Republic of Congo prepares for a much-delayed presidential election on December 23.
The military sources said one soldier and two rebels were killed early Monday in fighting.
Earlier, regional army spokesman Captain Dieudonne Kaserek, told AFP 12 rebel fighters had been killed including a deputy commander known as Alida. He said three of the soldiers drowned in a river during combat.
The clashes pit the army against rebels loyal to a former army general, William Amuri Yakutumba, who is opposed to Kabila.
The militia is allied to rebels of the National Liberation Front based in neighbouring Burundi, according to several regional sources.
In September of last year, the Yakutumba rebels attacked the town of Uvira on Lake Tanganyika opposite the Burundian capital Bujumbura. UN forces pushed them back with Congolese support.
In February the military said they had wiped out the Yakutumba with help from Burundi, where some of them had taken refuge.
The Fizi region was the cradle of the rebellion by Laurent-Desire Kabila, father of the current president, who ousted Mobutu Sese Seko in May 1997.
The former Belgian colony has not seen a peaceful transition of power since 1960.
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