Army spokesman Jules Yao Yao said the attack, launched on Wednesday by a force estimated at between 400 and 500, was repulsed that night.
"The participation of Liberian regular forces on the rebel side is...a certainty today," army spokesman Jules Yao Yao said on national television.
"It is possible that as I speak to you fighting has resumed," he added.
The army had previously blamed two rebel groups fighting in western Ivory Coast for the clashes on Wednesday, but said many of the fighters were Liberians and they appeared to have crossed into Ivory Coast from Liberia.
The attack, which a rebel commander blamed on Ivorian loyalist forces, took place on the town of Toulepleu in a cocoa-growing region of the world's top producer.
The fighting, in which the army said four loyalist and at least 15 rebels were killed, was the most serious in Ivory Coast since peace talks were launched in Paris last week.
The talks have brought together three rebel factions and political parties to try to end a four-month-old conflict that has left hundreds dead.
Wednesday's fighting followed an attack on the Liberian town of Gbein on Monday by Liberian rebels which Liberia said had crossed over from Ivory Coast.
Despite the clashes, many participants say they are optimistic a peace deal will be reached when African heads of state meet in Paris on Saturday and Sunday.
Gbagbo is to hold talks with French President Jacques Chirac on Friday afternoon, on the eve of the summit, which will also be attended by U.N. Secretary General Kofi Annan.
- Reuters - Thomson Reuters Foundation
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