Hundreds of thousands have fled their homes to escape violence
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The Liberian Government says its troops are fighting off rebels on the outskirts of the capital, Monrovia.
The rebels said there had been a skirmish at Klay Junction, north of the city, but said it was over - they blamed the government for starting it.
Peacekeepers are still days, if not weeks away, from arriving in the country as talks continue in neighbouring Ghana.
Correspondents say rumours of a rebel offensive are preventing Monrovia's displaced population from returning home.
Government officials said the rebel Liberians United for Reconciliation and Democracy (Lurd) had seized the key Klay Junction and were advancing towards the city limits.
"We are observing the ceasefire, but the rebels are not," said chief of security, General Benjamin Yeaten.
"We are defending. They are carrying on shelling towards Monrovia."
The BBC's West Africa correspondent Paul Welsh followed the country's most senior general from Monrovia to the front-line alongside pick-up trucks full of heavily-armed men.
He reports that the commander was briefed by the head of Liberia's marines about 15 kilometres from Klay. The commander was told fighting in the town, 50 km from Monrovia, was serious and was still going on.
'Terrible conditions'
Our correspondent said he could hear no gunfire or shelling from his position.
He also saw no refugees on the move, and the Red Cross said it had received no war wounded.
Both the government and the rebels have called for the immediate deployment of peacekeepers to try and bring security to the country.
A West African force has been pledged, and the US also promised troops of "limited size and tenure" once President Charles Taylor left the country.
Mr Taylor, indicted by a UN-backed international war crimes court in Sierra Leone, has agreed to leave but only when peacekeepers arrive.
Government claims that the rebels have broken the shaky ceasefire and that there have been skirmishes are becoming more frequent.
If they are true, it is worrying news for the Liberian people who face becoming caught up again in violent clashes, our correspondent says.
But he says that if it is unfounded propaganda aimed at bringing in peacekeepers more quickly, it is simply frightening people and stopping them from leaving the terrible conditions they face living rough in the capital city.