Mozambique's army is fighting Islamist insurgents who launched a major attack on the northern town of Macomia on Friday morning, President Filipe Nyusi said in a televised address.

The town is in Cabo Delgado, a gas-rich northern province where Islamic State-linked militants started an insurgency in 2017. Despite a large security response, there has been a surge in attacks since January this year.

"Macomia is under attack since this morning. Fire exchange still continues," he said at around 1000 GMT, adding that the militants initially withdrew after about 45 minutes of fighting, but then regrouped and came back.

Friday's attack appeared to be the most serious militant attack in some time. Local media reported that a large number of fighters were involved and many residents had fled.

A regional force from the Southern African Development Community which deployed in Mozambique in 2021 started withdrawing last month as its mandate ends in July.

Nyusi said that attacks can take place in such periods of transition, and that he hoped the SADC forces would be able to step in and help. It was unclear if they were still deployed in the area or involved in the fight.

Rwanda has also deployed troops to Mozambique to help fight the insurgency.

The offensive comes as French oil company TotalEnergies is seeking to restart a $20 billion liquefied natural gas terminal in Cabo Delgado that was halted in 2021 due to the insurgency. That project is some 200 kilometres north of Macomia, the town under attack.

ExxonMobil, with partner Eni, is also developing an LNG project in northern Mozambique and said last week that it was "optimistic and pushing forward" as the security situation had improved.