Gunfire has erupted in several cities in Ivory Coast, according to witnesses, as the military presses an operation aimed at ending a mutiny by soldiers demanding bonus payments.

Heavy gunfire was heard early on Monday in the east of the commercial capital, Abidjan, and Ivory Coast's second largest city, Bouake, which remains sealed off by mutinuous soldiers.

Later in the day, gunfire broke out a military camp in the port city of San Pedro, and mutineers blocked the main border crossing with neighbouring Burkina Faso.

Many businesses and schools have closed operations in Abidjan and other cities for fear of worsening unrest, and APBEF, Ivory Coast's banking association, has decided to shutter all banks.

Al Jazeera's Ahmed Idris, reporting from Abidjan on Monday, said the four-day mutiny had paralysed economic activity and brought large parts of the country to a standstill.

"It looks like the crisis is spreading gradually ... There is fear that if things escalate, it could result in loss of lives and injuries to many people," he said.

Heavy shooting was also heard in Daloa, a hub for the western cocoa-growing regions.

A spokesman for the mutiny denied that any clashes occurred in Bouake and said the renegade soldiers were firing in the air to dissuade any advance on the city.

On Sunday six people were wounded by gunfire in Bouake and one of three protesters shot and wounded there the previous day died of his wounds.

Mutiny over bonus

The unrest comes as authorities conduct a military operation "to re-establish order" after soldiers who staged a mutiny on Friday over bonus payments rejected the army's demand to disarm.

The mutineers, most of them former rebel fighters who fought to bring President Alassane Ouattara to power, have used gunfire to break up protests against the revolt, which began when a spokesman for the group dropped demands for extra pay promised by the government during negotiations to end a previous mutiny in January.

On Sunday, loyalist troops were deployed to Bouake and a delegation was sent in to meet leaders of the mutineers.

However, "negotiations ... to convince the mutineers to lay down their weapons have failed and the situation remains tense", Al Jazeera's Idris reported on Monday.

READ MORE: Ivory Coast launches military operation to quash mutiny

"The situation is dangerous in terms of what will happen if a full-blown confrontation erupts between loyal forces and mutineers - the civilian population will be caught in the crossfire."

Under a deal negotiated with the government in January, the soldiers were to be paid bonuses of 12m CFA francs (18,000 euros) each, with an initial payment of five million francs that month.

The 8,400 mutineers were due to get the rest of the sum this month.

But the government has struggled to make the payment, with a budget hit by the collapse in the price of cocoa, Ivory Coast's main export.

Last year, the government unveiled an ambitious plan to modernise the 22,000 strong military, part of which would involve the departure of several thousand men, particularly former rebels, who will not be replaced.