Armed militants attacked an army barracks and security posts at dawn in the eastern town of Ben Guerdane, triggering a firefight with security forces.
Twenty-eight "terrorists" were killed and seven other arrested in the attack, the defense and interior ministries said in a joint statement.
Ten members of the security forces and seven civilians were also killed in the clashes.
According to the statement, border crossings between Libya and Tunisia were shuttered and a manhunt was underway to nab the attackers. The two ministries went on to call on residents of the town “to remain at home”. Authorities imposed a curfew from 1800GMT - 0400 GMT 7 p.m. – 5 a.m. local time in Ben Guerdane, following the attack.
The U.S. State Department strongly condemned the “cowardly attack," while reaffirming Washington’s commitment to “Tunisia's security and to our close partnership to meet common security challenges throughout the region”.
Last week, Tunisian authorities said five militants had been killed and a cache of weapons seized in Ben Guerdane.
In November, at least 13 presidential guards were killed in a suicide bombing in the capital Tunis, in an attack claimed by Daesh terrorist group.
Following the attack, Tunisian authorities declared a 30-day countrywide state of emergency, along with a curfew in the capital and in three other provinces.
In an attempt to stop militants’ infiltration into its territories, Tunisia has built a 200-kilomenter (125-mile) barrier along its border with Libya, which has fallen into a civil war since the 2011 ouster and death of strongman Muammar Gaddafi.