Witnesses said several homes were hit by rockets and shells in the confrontation.
Nasser al-Jehimi of the medical centre in Sebha said 21 people were killed and around 100 others injured in clashes since Tuesday in the city between Awled Suleiman tribal members and the Guedadfa tribe of Libya's toppled dictator Moamer Kadhafi.
The casualty toll was for the Awed Suleiman tribe alone as information was not immediately available from another hospital being used for their rivals.
There was no official confirmation of the report.
Salah Badr, a member of Sebha city council, declined to give specifics but noted that relations between the two tribes had been strained for many years.
"A minor incident sparked the fire," he told AFP.
Since the downfall of Kadhafi in Libya's 2011 revolution, the country has been riven by deadly unrest and political divisions.
Regular inter-tribal clashes in Sebha have left several dozen people dead.
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