In Somalia, clashes between Islamist militia and interim government forces continued for the third straight day, despite western diplomatic efforts to stop the fighting and keep the region from sliding into chaos.  VOA Correspondent Alisha Ryu reports from our East Africa Bureau in Nairobi.

Islamist fighters in Mogadishu (October 2006 file photo)

Residents near the town of Dinsoor say they woke up to the sound of heavy artillery and gunfire.  The town is located about 100 kilometers southwest of Baidoa, where Somalia's besieged, Ethiopian-backed secular government is headquartered.

The clash followed a day of intense fighting on Wednesday.  Islamist forces and government troops pounded each other with rockets and artillery near two government military training camps, each within 30 kilometers of Baidoa.  The fighting sent hundreds of civilians fleeing for their lives.

Both sides claimed to have inflicted heavy casualties, including an Islamist claim that its forces killed an Ethiopian colonel and more than 60 of his troops. 

The interim government, which denies its forces are being backed by Ethiopian combat troops, leveled its own accusations against the Islamists. 

Deputy Defense Minister Salad Ali Jelle told reporters that one group of Islamist fighters involved in another clash near the town of Idale on Tuesday was led by Abu Taha al-Sudan, a Sudanese terrorist wanted by the United States for carrying out attacks against its embassies in east Africa and against an Israeli-owned hotel in Kenya in 2002.

Interim Foreign Minister Ismael Hurreh tells VOA that sources within the Islamic Courts Union often provide information about al-Sudan and other militants, believed to be operating freely in Somalia under the protection of the courts.

"We have eyewitnesses, people who have met them and who report to us," he said.  "And we know that man [al-Sudan] is in the leading position in the militias of the Islamic courts.  So, when we talk about these things, we are not talking simply of reporting, but actual facts on the ground."

But several Somali observers contacted by VOA say while it is true that al-Sudan has been operating in Somalia, he is best known for formulating strategy, not commanding military units on the ground.  The observers say they remain skeptical of the interim government's report.

In the capital Mogadishu, the leader of Somalia's Islamist movement, Sheikh Hassan Dahir Aweys, says that Somalia was now in a state of war and urged Somalis to unite against what he called a struggle against neighboring Ethiopia.

Louis Michel (r) and Somali PM Ali Mohamed Gedi in Baidoa, 20 Dec 2006

Awey's statement appears to undermine the diplomatic efforts of European Union envoy Louis Michel, who traveled Wednesday to Baidoa and Mogadishu in a bid to revive peace talks.  Late Wednesday, the envoy said that the warring parties had told him that they would ease tensions and resume negotiations in Khartoum, Sudan.

"They have both reaffirmed to an immediate de-escalation in military confrontation and cessation of hostilities and to refrain from any hostile acts," he noted.  "To my opinion, most important, they both decided to resume the Khartoum dialogue."

The two-year-old interim government is internationally recognized, but has had little power to confront the Islamists, who seized Mogadishu in June and have rapidly expanded their power throughout the country.

Ethiopia, which believes the Islamists could try to absorb parts of Ethiopia into a greater Somalia, is believed to have sent thousands of troops into Somalia to prop up the government.  In turn, Ethiopia's rival, Eritrea, is said to be providing arms and troops to the Islamists.  Both countries deny the charges.  

The Islamists have demanded the Ethiopians withdraw or face attack, heightening fear that Somalia's conflict could widen into a regional war.