Benghazi port
The Libyan army has ordered residents to evacuate the area around Benghazi port (seen here in November 2012)AFP

A Libyan Navy vessel docked at Benghazi port has been hit in clashes between the Libyan army and Islamist militants, according to residents.

A Reuters reporter claimed that smoke was rising from the port area where the clashes took place and the Libyan army had transferred heavy guns to strike against the Islamists.

A security source claimed that the vessel was sinking in the port but this could not be immediately verified.

Conflicting reports suggested that the vessel was an oil tanker that had caught fire after Islamist militias fired rocket propelled grenades from high-rise buildings overlooking the port.

Libyan army spokesman Mohammed Hegazi told the Associated Press that the Libyan troops are battling the Islamist factions in the city's central district, in close proximity to the port.

It remains unclear if anyone was on board the vessel at the time it was struck or the number of casualties caused by the clashes.

The port itself has been closed for weeks and the army has ordered civilians to evacuate the city centre to prevent casualties.

At least 230 people have been killed since the army began its offensive on the Islamist groups in the city which have grown in influence since the fall of Muammar Gaddafi at the height of the Arab Spring in 2011.