“Fighting continued today between Daesh and oil facility guards backed by the air force,” a spokesman for the guards said, using an Arabic acronym for IS.
“The fighting is happening in an area 20 kilometres (12 miles) southwest of Al-Sidra and we have lost seven men,” he said.
IS has for several weeks been trying to push east from its coastal stronghold of Sirte to reach Libya’s “oil crescent” and the key oil terminals of Al-Sidra and Ras Lanouf.
On Monday IS fighters launched attacks, including a suicide car bombing, near both oil terminals but were repulsed, an army official said.
The pro-IS Amaq news agency released video footage showing IS fighters entering Al-Sidra on Monday.
The jihadist group said the attack came after it took control of Ben Jawad town, 150 kilometres (90 miles) east of Sirte.
Air strikes were carried out “from dawn until dusk” on jihadist targets between Al-Sidra and Ben Jawad, an army official said.
The jihadists have taken advantage of chaos in Libya since the 2011 revolt that ousted and killed longtime dictator Moamer Kadhafi to extend their influence there.
Monday’s attack was the first of its kind since IS seized Kadhafi’s hometown of Sirte in June 2015.
Libya has had rival administrations since August 2014, when an Islamist-backed militia alliance overran Tripoli, forcing the government to take refuge in the east.
The United Nations is pressing both sides to accept a power-sharing agreement it hopes will tackle help to reverse IS’s territorial gains.