A European Union envoy says Somalia's interim government and the rival Islamist movement have agreed to a new round of peace talks.
The announcement by EU official Louis Michel Wednesday came as the two sides' fighters traded gunfire and mortar shells near the government's home base of Baidoa.
The head of the Islamist movement, Sheikh Hassan Dahir Aweys, played down the fighting as a "small incident."
But witnesses reported heavy clashes at several locations in southern Somalia, including the towns of Daynunay, Bur Hakaba, Mode Mode and Idale. There are unconfirmed reports of casualties.
Michel spoke to reporters in the capital, Mogadishu, after meeting with both Islamist and government leaders earlier in the day. He said he could not give a date for the new talks, but said they would be in Khartoum.
The Sudanese government has hosted three previous rounds of talks between the sides.
The Islamists pose a strong challenge to the secular Somali interim government, which has international backing but little power outside Baidoa.
Islamist forces have gained control over much of southern and central Somalia since taking over the capital in June.
The Islamists recently declared a holy war on neighboring Ethiopia, which has sent an undetermined number of soldiers to help the interim government. A Somali official says Ethiopian troops were deployed today to help the pro-government forces.
The Islamists had promised to attack Ethiopian troops this week if they did not leave Somali territory.
Diplomats fear the fighting could trigger a wider conflict in the Horn of Africa involving Ethiopia's neighbor and rival, Eritrea, which backs the Islamists.
Somalia has not had an effective central government since 1991, when warlords overthrew the last president.
Some information for this report was provided by AP and Reuters.