The fighting broke out late in the evening and continued past midnight. Beside automatic weapons fire, more than a dozen explosions, believed to be from rocket-propelled grenades, were heard.
About 100 police, loyal to Ranariddh's rival, Second Prime Minister Hun Sen, surrounded the house. It was not clear if Ranariddh was inside, though he normally stays there. A soldier loyal to his royalist party was reported killed.
One B-40 rocket landed in the nearby compound of US ambassador Kenneth Quinn, causing slight damage.
The fighting broke out at a time of heightened tensions in Cambodia, as the once fearsome Khmer Rouge rebel movement appeared to be on its last legs, with all but a few of its hardcore supporters preparing to make peace.
Ranariddh and Hun Sen have been vying for the support of the defecting guerrillas, who are considered a potentially powerful force ahead of elections scheduled for next year.
Earlier yesterday, the Khmer Rouge rebels hinted that their leader, Pol Pot, had been overthrown. Breaking nearly a week of silence, the guerrilla organisation accused Pol Pot, of "betrayal" in a clandestine radio broadcast.
The statement, which follows several days of fighting between rival Khmer Rouge factions, said the group had now "solved quietly" its internal problems and was ready to make peace.
However, there was no direct word on the fate of Pol Pot himself, the man whose brutal regime saw an estimated 2 million people die. "What is absolutely clear from this broadcast is that Pol Pot is no longer a player," one diplomat said.
A purge last week of Khmer Rouge commanders sympathetic to a proposed peace deal with the government is reported to have split the group, forcing Pol Pot and a 200 hardline loyalists to abandon their remote Anlong Veng stronghold.