Lesotho's Prime Minister Thomas Thabane on Saturday accused his country's army of attempting a coup against him.
However, the military denied seeking to oust him and said its soldiers had returned to barracks, reports Reuters.
Gunfire was heard in Maseru, capital of the small mountainous Southern African kingdom encircled by South Africa.
Army units occupied police headquarters and surrounded the prime minister's residence, residents and diplomats said.
"It is a military coup because it is led by the military. And the military are outside the instructions of the commander in chief, who is myself," Thabane told South Africa's ENCA TV by telephone.
He would meet South African leaders, representing the regional Southern African Development Community (SADC) later on Saturday to discuss the crisis in Lesotho, he added.
Residents and diplomats said that heavily-armed soldiers had surrounded State House and also occupied the main headquarters of the police force, which is loyal to Prime Minister Thabane.
The diplomats said that the army was mostly loyal to Deputy Prime Minister Mothetjoa Metsing, who had vowed to form a new coalition that would oust Thabane, who in June suspended parliament to avoid a no-confidence vote.
Giving its version of events, the Lesotho Defense Force denied attempting a coup against Thabane, saying it had moved against police elements suspected of planning to arm a political faction, an army spokesman said.
"There is nothing like that, the situation has returned to normalcy ... the military has returned to their barracks," Major Ntlele Ntoi told Reuters.
He added the military "supports the democratically-elected government of the day."
Diplomatic sources said the army made its move after the prime minister had fired the army commander, Lt.-Gen. Kennedy Tlali Kamoli.
The army spokesman said Kamoli was still in charge of the military.
Residents said the streets of the capital were calm, although some shops remained closed.
South Africa and regional grouping SADC were expected to issue a call for calm and warn the Lesotho political rivals that no unconstitutional change of government would be tolerated.
Since independence in 1966, Lesotho has undergone a number of military coups.
In 1998 at least 58 locals and eight South African soldiers died and large parts of Maseru were damaged during a political stand-off and subsequent fighting.