Both Sir Michael Somare (L) and Peter O'Neill are claiming the role of prime ministerSoldiers in Papua New Guinea say they have taken control of the military and ousted the defence chief, reports say.
The apparent mutiny, involving 12-20 soldiers, took place early in the morning in Port Moresby, Australian media and officials said.
The incident appears to be linked to the conflict between Peter O'Neill and Sir Michael Somare - the two men claiming the role of prime minister.
They have been wrangling over the role for six months.
The leader of the soldiers, retired Colonel Yaura Sasa, is a former defence attache to Indonesia.
He has declared himself commander after placing the head of the defence forces, Brigadier General Francis Agwi, under house arrest.
He has denied staging a mutiny and said instead that he was appointed by Sir Michael's government.
''My task is restoring the integrity and respect of the constitution and the judiciary," he said at a press conference at the military headquarters.
"I am now calling on the head of state to immediately implement Sir Michael's post as prime minister," he added.
Brig Gen Agwi backed Mr O'Neill as Papua New Guinea's prime minister.
According to the ABC report, the soldiers overpowered guards at Taurama barracks and took the commanding officer there captive.
They then moved to Murray Barracks, placing Brig Gen Agwi under house arrest.
Power tussleThe incident is the latest conflict in a power tussle between the two men claiming the South Pacific nation's top job.
Sir Michael left Papua New Guinea in March to receive treatment for a heart condition. In June, his family announced he was standing down from politics, a move he later said had been taken without consulting him.
He remained out of the country for five months and in August, MPs declared the position vacant and that Sir Michael was no longer an MP. Mr O'Neill was elected by 70 votes to 24, replacing acting Prime Minister Sam Abal.
A Supreme Court ruling in December 2011 then stated that parliament had acted illegally by electing Mr O'Neill prime minister. The court also ruled in a 3-2 decision that Sir Michael should be ''restored to the office of prime minister''.
Mr O'Neill, who is backed by the civil service and effectively running the country, refused to step down.
Last week, Sir Michael showed up in parliament waving court documents and demanding to be reinstated. A rowdy scene ensued, with Sir Michael being ejected.
The Australian Department of Foreign Affairs and Trade has issued a travel advisory to ''limit travel around Port Moresby today''.
"We urge that the situation be resolved as soon as possible, and that the PNGDF chain of command is restored," the department said in a statement.
Mr O'Neill has not made any statement on the situation, the Associated Press news agency reported.
However, Australia's High Commissioner in Port Moresby, Ian Kemish, has spoken Mr O'Neill, who said authorities were taking steps to manage the situation, said an Australian Department of Foreign Affairs and Trade spokesperson.
The Head of the Australian Defence Staff at the High Commission has also talked with Brigadier Agwi.
''We understand that discussions (are) underway within the PNGDF to resolve the matter,'' the spokesperson said.
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