The clashes highlight the challenges the government faces in imposing its authority after the ouster of Muammar Gaddafi.
Fighting between gunmen from Sabha and fighters from the Tibu ethnic group had reached the centre of Sabha, Libya's fourth-largest city, Ibrahim Misbah, a doctor at the main hospital said.
An Interior Ministry official said the army had sent 300 soldiers stationed in southern Libya to help calm the situation on Monday. Another 300 soldiers left Tripoli on Tuesday to assist, he added.
Sabha fighter Oweidat al-Hifnawi said government forces had arrived in Sabha and were "in the middle of the clashes".
"We know that they are here to try to solve the problem and not fight," he said. "There are unconfirmed reports that they have retreated out of the city."
The ruling National Transitional Council (NTC) is struggling to assert its authority across Libya, where rival militias and tribal groups jostle for power and resources after last year's rebellion that ousted Gaddafi.
Hampered by the lack of a coherent national army, the NTC has struggled to persuade the myriad o f militias who fought Gaddafi to put down their guns and join the armed forces and police.
Fourteen people were killed on Tuesday and 30 people were wounded, Misbah said, giving numbers for the Sabha side. Around 20 people were killed in fighting by Monday, he said.
"The hospital crew has been working around the clock since Monday night and the injured keep coming in," he told Reuters.
Ali Galama, a Tibu representative on the NTC from Murzuq, south of Sabha, said 15 people were killed on the Tibu side and 18 were wounded. While he was speaking from Benghazi, he said he was in touch with Tibu in the area by phone. "We have no place to transfer them. We don't have the facilities to look after them".
Fighting broke out on Sunday between former rebel fighters from Sabha and gunmen from the Tibu ethnic group after a Sabha man was killed in a dispute over a car.
Fighter Hifnawi said the militiamen opened fire at each other and clashes, first centred around the airport, had moved downtown.
"There are Tibu snipers all over the Sabha city centre and the number of the wounded keeps going up," Hifnawi said.
Mousa al-Koni, a Tibu representative on the NTC, said by phone from Tunis the clashes were an unfortunate escalation of an internal dispute after Tibu former fighters tried to steal a car from a member of the Sabha militia. He said a reconciliation committee was being formed to help stop the violence.
Last month, dozens of people were killed in clashes between tribes in the far southeastern province of Al Kufra. Armed forces eventually intervened to stop the fighting, in a rare example of the Tripoli government imposing its authority.
Members of the Tibu ethnic group, who were also involved in the fighting in Kufra, are mainly found in Chad but also inhabit parts of southern Libya.
