Some villagers have escaped the violence in canoes
Villagers fleeing violence in Nigeria's oil-rich western Niger Delta say dozens of people have been killed in clashes between soldiers and rival gangs of ethnic militants.
Fighting between two local communities, the Ijaw and Itsekiri, has been raging for more than a week, drawing in thousands of soldiers.
The refugees described soldiers and militants burning down dozens of villages and firing indiscriminately.
The violence prompted the US oil company, Chevron Texaco, to suspend operations in the region on Thursday - slashing output levels in Africa's biggest producer by 13%.
Some reports said the Anglo-Dutch company Shell had also confirmed it would not be able to meet its contractual obligations on Friday.
Refugees from both communities, retreating from the swampy region south of the town of Warri, told of scores of deaths.
Ruth Tinghala described soldiers firing "horizontally" and torching homes and shops.
"I saw many [people] fall," she told news agency AP.
"I didn't stay to see if they were dead or alive."
Ijaw leaders and refugees say 50 fighters were killed in battles with navy and army forces in the village of Okorenkoro on Thursday alone.
They say a state of siege has been imposed on the Ijaw community, with navy gunboats and troops imposing a 24-hour blockade on the creeks around their villages, according to the AFP news agency.
Military officials have previously denied attacking civilians, and stressed they used minimum force when possible.
Ten government troops are said to have been killed.
On Thursday, Chevron Texaco evacuated hundreds of villagers by air from areas affected by the violence.
On Wednesday, President Olusegun Obasanjo issued a strong warning that the current high level of violence in the country was posing a threat to the success of next month's elections.
The Ijaw are demanding more political representation and compensation from oil companies operating in the area. They say the oil industry has polluted their fishing communities.
A militant Ijaw leader has said that protests against the Itsekiri and the oil companies will continue until the government addresses the issue.
Our correspondent Dan Isaacs says that this is extremely unlikely ahead of the elections and he says it is difficult to see how an effective poll can take place in this part of the southern Delta under the present circumstances.
He adds that even if the unrest subsides, many hundreds, perhaps thousands of people have been displaced and election officials will be extremely wary about operating in such an unstable region.