Ethiopia's Ogaden National Liberation Front (ONLF) rebels said they have killed 140 government soldiers in an assault targeting a visiting senior official, a statement Ethiopia immediately denounced as false.
The ONLF also warned the government against using food as a political tool. The United Nations and the Ethiopian government have said they would begin working together to deliver food, after a crackdown on the ONLF hampered aid flows.
"We will fight the Ethiopian army if they try to block aid," ONLF spokesman Abdirahman Mahdi said from London.
The rebel group accuses the government of giving aid only to people who are allied with its militias. Ethiopa counters that it monitors the aid to make sure it is not diverted to insurgents in the arid east.
The rebels, who want more autonomy in the region of Ethiopia bordering Somalia, said the attack on Saturday wounded other troops protecting the senior official and said they seized ammunition and military hardware.
Both sides routinely claim to inflict large numbers of casualties on the other, but the reports are difficult to independently verify.
"This operation was a direct response to the burning of Caado village recently and the continuing abuses against the people of Ogaden," the ONLF said in a statement.
The government immediately dismissed the rebel report as false information spread by ONLF supporters in Europe "who do not know the situation on the ground".
"The ONLF is not in a position to launch such an attack at this juncture. This is an attempt to hoodwink international opinion. Such things have never happened," Information Ministry spokesman Zemedhun Tekle said.
Mahdi challenged the government to allow independent media into the region, from which they are now barred, "if they claim nothing happened."
The official the ONLF said was targeted was Abay Tsehaye, Ethiopian Prime Minister Meles Zenawi's senior adviser for regional affairs. The ONLF said Abay escaped via helicopter with military officers after rebels blocked the roads.
Last week, the United Nations announced it had reached agreement with the government that would speed up aid flows and ensure relief supplies went to the neediest people.
The ONLF is an ethnically Somali group. The insurgency began in 1984 and has persisted at a low level since then.
It accuses the government of routinely harassing the population in the Ogaden and humanitarian organisations have confirmed reports of soldiers burning villages or restricting the flow of aid.
Ethiopia calls the ONLF a terrorist organisation backed by foe Eritrea. Though Asmara denies backing rebels, analysts say it funds and trains insurgent groups opposed to the Ethiopian government.
The ONLF in April attacked an oil field run by a Chinese company, killing at least 74 people including six Chinese oil workers.
The government responded with a major crackdown that drew criticism from humanitarian organisations that said it was blocking aid shipments.