At least two policemen are reported to have died in clashes at a village in Malaysia's Sabah province which was being occupied by a Philippines clan.
The group - supporters of a Muslim sultan that makes a historical claim to the land - said police had opened fire.
But Philippine and Malaysian officials said the police officers were killed by the clan, and that the two-week stand-off was now over.
Both governments had been urging the group to leave the village peacefully.
Malaysian police have so far not commented on the incident.
At least 100 members of the clan, who call themselves the Royal Army of Sulu, arrived in Lahad Datu by boat just over two weeks ago, demanding recognition from the Malaysian government. Some 30 of them were armed.
Agbimuddin Kiram, who is the younger brother of the Sultan of Sulu Jamalul Kiram III and was in the village, told a Philippines radio station on Friday morning that police had surrounded them and opened fire.
"They are here, they entered our area so we have to defend ourselves. There's shooting already," he told Manila-based DZBB radio.
"We're surrounded. We will defend ourselves," he said. The group later said that 10 of their members had been killed, but this has not been independently confirmed.
The village the Filipinos were occupying formed part of the Sulu Sultanate - which once spread over several southern Philippine islands as well as parts of Borneo - before it was designated a British protectorate in the 1800s.
'Not a single shot'
Raul Hernandez, a spokesman for the Philippine foreign department, said two police officers had died, as well as the owner of a house in which the clan had been staying, AFP reports.
Citing a report by Malaysia's ambassador, he said 10 of the clan had been arrested.
Malaysia's Bernama state news agency said the two officers were killed in a mortar attack.
It quoted Malaysia Prime Minister Najib Razak as having said earlier on Friday: "Our patience has reached the limit. We have a plan to remove them, they should have surrendered and left."
A spokesman for Philippines President Benigno Aquino had earlier told Reuters that warning shots had been fired when members of the group tried to breach a security cordon.
But a message was posted on the Facebook page of Malaysian Home Minister Hishammuddin Hussein saying that Malaysian forces had not fired "a single shot" but "were shot at 10am this morning."
Malaysia and the Philippines had agreed the stand-off would be ended peacefully, but the occupation has heightened tensions between the two countries over the ownership of Sabah.
The area around the village had been evacuated as a precaution after the clan arrived, and the security presence was increased.
Sabah became part of Malaysia in 1963, and the country still pays a token rent to the Sulu Sultanate each year.
Earlier this week, President Aquino urged the sultan to call an end to the "foolhardy act", warning the group would face "the full force of the law" to achieve justice.
"This is a situation that cannot persist," Mr Aquino said in a televised address. "If you are truly the leader of your people, you should be one with us in ordering your followers to return home peacefully."