Diplomats say talks to avert war between Somalia's government and the country's powerful Islamist movement have broken down.

In a statement Wednesday, the mediators said the talks have been postponed indefinitely, adding that there is a need for further consultations.  They called for restraint by both sides.

The mediators had been trying to get the sides to sit down face-to-face in Sudan's capital, Khartoum. 

Diplomats fear the failure of the talks could lead to full-scale war across the Horn of Africa. 

Earlier Wednesday, witnesses said Islamist forces have taken control of another key Somali port.  Residents of Hobyo on the central Somali coast say there was no fighting as Islamists entered the town Tuesday.

Islamist forces remain positioned near the interim government's base of Baidoa, prompting officials there to prepare for a possible attack.

The militia groups loyal to Somalia's Islamic courts have seized control of much of the country's south since winning a battle for the capital, Mogadishu, in June.  Somalia's interim government has international support but virtually no power outside Baidoa. 

The Islamists have said they will not negotiate until Ethiopian soldiers leave Somali territory.

The Islamists say Ethiopia has sent thousands of troops across the border to protect the weak Somali interim government.  Ethiopia denies this, saying it has sent only a few hundred military instructors.

The Islamists recently declared a holy war on Ethiopia for its backing of the government.  Diplomats fear war in Somalia could also draw in Ethiopia's rival Eritrea, which the United States has accused of arming the Islamists.  Eritrea called that charge a "pure fabrication."

Some information for this report was provided by AFP and Reuters.