At least 20 fighters were killed in clashes in eastern Libya between Islamic State and another Islamist force that later declared jihad against its hardline rival, residents and medical sources said yesterday.

Forces loyal to the official government later sent an air strike against suspected Islamic State positions in Derna, said Nasser al-Hassi, spokesman for Benghazi’s air base.

Fighting erupted in the city of Derna after a leader in the Islamist umbrella group Majlis al-Shura was killed, apparently for refusing to swear allegiance to Islamic State’s leader Abu Bakr al-Baghdadi, according to residents.

Islamic State and other Islamist groups have thrived in Libya since two governments began fighting for control of the oil producer, leaving a security vacuum four years after the ousting of Muammar Gaddafi.

The rapid rise in Libya of Islamic State, which first emerged in Syria and Iraq, is worrying Western powers who fear the militant group will forge a base just across the Mediterranean from mainland Europe.

The fighting in Derna lasted until yesterday, by which time Salem Derbi, a Majlis leader, two other leaders and around 18 Islamic State fighters had been killed, medical sources said.

Majlis al-Shura later declared jihad, or holy war, on Islamic State. The battle appears to have been the largest yet between Islamic State and rivals in Derna.

If there is no deal, the winners will be other radical groups, ISIS above all

“We, the Mujahideen of the Derna council, have warned those Islamic State militants to stop their criminal acts but they were committing even more crimes,” the statement said. Pictures on social media were posted as showing a building linked to Islamic State being bombed by a war plane taking off from a Benghazi air base belonging to the internationally recognised government.

Islamic State has expanded its territory to include the whole of the central city of Sirte, and Harwa to the east. The group has carried out attacks on oilfields and embassies and also claimed the killing of dozens of Egyptian and Ethiopian Christians.

Angry supporters of the Majlis al-Shura stormed several buildings held by Islamic State during the fighting, while shops closed and frightened residents stayed indoors yesterday. Libya is in chaos as two governments controlling limited territory fight each other, with Islamic State attacking forces of both administrations.

The official government has been based in the east since losing the capital in August to rival group Libya Dawn, which set up its own administration with some Islamist links.

Meanwhile yesterday European powers urged Libya's warring factions to accept a peace deal within days, warning them that without an accord the only winners would be Islamist militants who have used the country's chaos to gain ground.

Delegations from Libya's two rival governments met with European leaders in Berlin to discuss a UN- sponsored peace and power-sharing proposal despite splits among some of the parties.

The talks were the latest push by the international community to get Libya's rival factions to end a crisis that threatens to turn the North African country into a failed state just across the Mediterranean sea from Europe.

'If there is no deal in the next days or weeks, no one at the negotiating table will be a winner. The winners will be other radical groups, ISIS above all,' German Foreign Minister Frank-Walter Steinmeier said in Berlin.