A clan of around 180 Filipino Muslims, 30 of whom are armed, set up camp in the town of Lahad Datu on February 12 to assert their historical claim to the territory, Philippine authorities said.
Shots were exchanged after Malaysian forces moved in to end the stand-off, clan leader Rajah Muda Kiram told Manila radio station dzRH.
The shootout left 10 of the Filipinos dead, including a woman, while four were wounded, said Abraham Idjirani, a spokesman for the Sultanate of Sulu, whose family claims ownership of Sabah.
"The massive exchange of gunfire has stopped but there is sniping activity from the Malaysian forces," he told dpa by telephone.
Malaysian Home Minister Hishammuddin Hussein blamed the Filipinos for the hostilities. "It was the intruders that opened fire first,"he said.
Malaysian Prime Minister Najib Razak urged the Filipinos to leave Sabah, but did not mention the firefight.//DPA