Chad's ruling military council says six of its soldiers were killed in a battle near the northern town of Nokou that resulted in several hundred killed on the rebel side and 60 captured.
The two sides were fighting on Thursday near Nokou, about 20 kilometres from where former president Idriss Deby was fatally wounded in April, plunging the country into crisis.
The council said it had successfully repelled a rebel incursion towards Nokou, and an additional 22 of its own soldiers were wounded in the encounter.
"The search for the final fugitives continues," it said on Friday.
There was no immediate comment from the rebels.
The military council run by Deby's son, Mahamat Idriss Deby, seized power after the former's death on April 19 and promised to hold elections within 18 months.
The northern rebels have rejected that and are continuing to fight the army in the desert.
The transition and the wrangling around it is being closely watched in a country that is a power in central Africa and a longtime Western ally against Islamist militants across the Sahel.
On Thursday, a group describing itself as a coalition of the rebels said they had routed Chadian army forces in the northwestern Tibesti region bordering Niger.
Military spokesman Azem Bermendao Agouna later said this was not correct and there was no rebel coalition operating in that area.
Deby was killed as he visited troops fighting Libya-based rebels from the Front for Change and Concord in Chad (FACT), which opposed his 30-year rule. Opposition politicians have condemned the council's assumption of power since his death as a coup.
Australian Associated Press