"We are getting information that Qandala has fallen this morning," said Mohamed Muse, an elder in the town of Bossaso, which lies about 70 kilometres from Qandala.
"Armed Islamist militiamen who we believe are connected with the Islamic State organisation stormed the town and told people they are in control," he said.
Amaq, the IS news agency, reported that Qandala, located on the Gulf of Aden opposite Yemen, had been taken by "Islamic State fighters".
Several local officials said it had fallen to armed Islamists and that part of the population had fled.
"The Islamist fighters have taken position alongside the coast and several locations inside town but we don't know who exactly they are," he added.
Government officials in Puntland, a semi-autonomous region in northern Somalia, did not comment on the attack.
While the Al-Qaeda affiliated Shabaab group is active in much of the south and centre of Somalia, it barely has a presence in Puntland.
In March, a few dozen Shabaab fighters travelled by sea from southern Somalia and briefly took control of several coastal villages in Puntland before being killed or captured by the region's security forces.
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