The battle between the army and Revolutionary Armed Forces of Colombia (FARC) guerrillas began at dawn around the Andean village of Gutierrez, 15 miles south of Bogota, a city of 7 million inhabitants.
The village itself did not, however, come under fire and there was no immediate danger of the fighting spreading to the poor southern neighborhoods of Bogota - traditional hotbeds of rebel support.
Gen. Fernando Tapias said the rebels had been planning a show of strength in the capital before the July 20 start of the latest round of peace talks between the FARC and the government.
The fighting was the worst since the peace process was formally launched in January. Negotiations are going ahead without any prior cease-fire agreement and are aimed at ending the long-running guerrilla war that has cost 35,000 lives in just 10 years.
There were conflicting estimates of each side's casualties in the combat. The Colombian army press office initially reported as many as 15 soldiers were killed, but there were also reports of 40 army soldiers killed.
While the attack may not have signaled a further threat to Colombia's stability, it was hard to escape the ominous symbolism of such a large assault so close to Bogota - a modern metropolis that has lived largely untouched by the civil conflict that rages in Colombia's vast, poor countryside.
Â"This is not a disaster for the army. There have been heavy losses on both sides,Â" Tapias told reporters. An army spokesman said at least 40 crack insurgency troops had died as well as 38 FARC insurgents.
Â"The FARC cannot take Bogota but they wanted to come to Bogota to commit a series of terrorist acts so that the country bows to all their demands at the peace table,Â" he added.
The fighting, between at least 500 FARC fighters and more than 1,000 troops, raged on after dark Thursday in the area around Gutierrez, a remote zone of deep chasms and towering peaks.
The region is often cloaked in thick fog and low clouds for days at a time, making it virtually impossible for the army to use helicopter gunships against the rebels or fly in reinforcements.
Large-scale rebel attacks inside the capital are extremely rare.
The last major raid was carried out against the Palace of Justice in downtown Bogota by the now-defunct M-19 rebel force in 1985. The operation ended in disaster for the M-19.
The FARC, Colombia's largest rebel group, has urban militias in Bogota but those usually conduct isolated bomb attacks, intelligence gathering and kidnapping.
The latest phase of peace talks were due to start Wednesday but were postponed until July 20 ecause of logistical problems.
Thursday clashes seemed unlikely to upset the negotiating timetable but are likely to fuel growing public skepticism, shown in recent opinion polls, about the rebels real desire for peace.
Â"This is a demented act ... and is a long way from demonstrating a real will for peace,Â" Defense Minister Luis Fernando Ramirez said.
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