Ethiopian and Somali government troops are engaged in what they were describing as one the "final battles" of the war with hundreds of Islamist fighters in the south-west of Somalia.
With combat intensifying near its border, and renewed fears that the conflict may spread across the region, the Kenyan government sent extra forces to the area and declared the frontier has been "sealed". Sources say American forces were helping to direct attacks by Ethiopian helicopter gunships as US warships stepped up patrols off Somalia.
Abdirahman Dinari, a spokes-man for Somalia's transitional federal government, said the Islamists "were being surrounded from every direction" in the district of Badade. "The fighting is going on. We hope they will either surrender or be killed by our troops. Their resistance is failing. Some of them are trying to escape by sea, but US anti-terrorist forces have been deployed there to prevent them." In Washington, a State Department spokesman, Sean McCormack, said US Navy vessels were looking for al-Qa'ida members and their allies.
The US, which claims attacks on its embassies in East Africa had been organised by al-Qa'ida members based in Somalia, also has personnel working with the Kenyans at the border.
The Kenyan Foreign Affairs minister, Raphael Tuju, said: "We will not allow combatants and their families to use this country as a base. It is apparent that some so-called refugees are combatants on the run. We have arrested men holding British, Canadian, Eritrean and Danish passports."
But the United Nations said an acute humanitarian crisis was developing in the wake of the fighting, with almost 10,000 Somalis encamped at the town of Doble, near the Kenyan border. Geoff Wordley, of UNHCR, said: "The situation is pretty bad, these people have no assistance, or food or water." The US Secretary of State Condoleezza Rice, said the US will provide $16m (£8.1m) in aid to Somalia. Of this $11.5m will be in food, $1.5m in non-food assistance and $3.5m to help refugees.
Jendayi Frazer, the assistant US secretary of state for Africa, said there had been no request for US troops or military assistance for an airlift, but that she did not rule out that it could be requested and supplied later if necessary. In Somalia, the Interior Minister, Hussein Aideed, claimed that "there are 3,500 Islamists hiding in Mogadishu and they are likely to destabilise the security of the city".
Mr Aideed, son of the warlord the Americans attempted to capture or kill during their ill-fated intervention in Somalia, portrayed in the film Black Hawk Down, is now a staunch ally of Washington. He added that the Islamists may begin the bombing campaign they had threatened since being driven out of the Somali capital by Ethiopian and government forces.
But a fresh outbreak of violence in Mogadishu appeared to be the responsibility of warlord-led militias who had reoccupied the city since the demise of the Islamists.
Militia fighters were accused of opening fire at an oil tanker in the outskirts of the city. The driver, Ali Tusbah, said afterwards: "The militias fired three RPGs [rocket-propelled grenades] at us and one of them hit my truck. They were bandits who wanted money, just like the old days."
The Somali government, which could barely control the one remaining city, Baidoa, under its jurisdiction, has given Mogadishu residents three days to hand in weapons.
Mr Aideed said: "It can, in fact take years. The three days should not be taken literally. Disarming Somalis is not easy. The government will have a tough time collecting the arms and specifically the small-arms."
Very few have been handed in. One resident said: "I have an AK-47 and a pistol. I will not surrender them because I don't see any trustworthy person to give them to. People have started burying their weapons. Others have transported their heavy weapons outside Mogadishu."
The Ethiopian Prime Minister, Meles Zenawi, said he wanted to withdraw his troops within a few weeks. Talks are being held for an African Union force to replace them.Reuse content