(AFP) - Islamist militants occupied a key port in gas-rich northern Mozambique on Wednesday following days of attacks claimed by an Islamic State-affiliated group, a military source and local media said.

"The port of Mocimboa da Praia was captured by the terrorists at dawn," the Moz24Horas website reported, while a military source told AFP that the small town and its port had "fallen".

The assault is the latest in an intensifying insurgency in the country's north since 2017 which has killed more than 1,000 people and complicated plans to develop its offshore gas reserves.

Mozambique's defence forces (FDS) confirmed that "terrorists" had launched "sequenced attacks" on several villages surrounding the port over the past week in an attempt to occupy the town.

"At the moment, there are ongoing actions to neutralise the terrorists that are using populations in the affected areas as shields," the FDS said in a statement.

Mocimboa da Praia lies less than 80 kilometres (50 miles) south of Afungi peninsula where a liquefied natural gas (LNG) facility, one of Africa's biggest single investment projects, is located.

The port is currently a major traffic hub for the gas project.

- Grenade sinks ex-leader's boat -

The military source said that during Wednesday's assault a rocket-propelled grenade sank a boat owned by former president Armando Guebuza.

"The situation is complicated," the source said.

Under Guebuza, Mozambique secretly borrowed about $2 billion from Credit Suisse and Russia's VTB Bank to finance maritime surveillance and buy military and tuna fishing vessels from Privinvest in 2013 and 2014.

But the government only disclosed the debt in 2016 -- a development that plunged the poor, donor-dependent southern African country into its worst-ever financial crisis.

Attacks in the northern region have already killed at least 1,300 people, according to the Armed Conflict Location & Event Data Project (ACLED).

Displaced people number more than 250,000, according to aid organisations working locally.

In its latest weekly report released on Wednesday, ACLED said "insurgents and government security forces have been in more or less constant running battles in the area" for the past week.

The attacks started in 2017 in Mocimboa da Praia and have since spread to massive swathes of Cabo Delgado province.

The latest attack -- the third on the town this year -- was claimed by the Islamic State Central Africa Province (ISCAP).

The IS-affiliated group has the stated goal of establishing a caliphate in the region.

ISCAP has claimed several attacks since June 2019 via social media, often posting images of slain soldiers and seized weapons.

© Agence France-Presse