Insurgents in Mogadishu attack AU peacekeepers

By Abdi Sheikh and Mohamed Ahmed

MOGADISHU (Reuters) - Hardline Islamist insurgents in Somalia's capital fired mortar bombs at the presidential palace and attacked African Union peacekeepers on Saturday night at the end of a second day of heavy fighting.

Government forces and rebels blasted shells at each other in the afternoon and fighters clashed in parts of Mogadishu. Two people were killed and 10 wounded near Bakara Market, an al Shabaab rebel stronghold. Fighting on Friday killed at least 45.

A human rights group said many residents fled during a lull in the violence on Saturday, joining 49,000 others who have fled the city during an upsurge of violence over the past two weeks.

Neighbouring states and Western governments fear the Horn of Africa nation, mired in civil war for 18 years, could become a haven for militants linked to al Qaeda unless the new government of President Sheikh Sharif Ahmed can defeat them.

At night, heavy gunfire and explosions could still be heard.

"Opposition groups have attacked us with rocket-propelled grenades," a senior Burundian officer told Reuters. "They are still firing at us and we shall defend ourselves."

The African Union has some 4,300 peacekeepers from Burundi and Uganda in Mogadishu to help protect key sites. Their mandate limits the force to defending itself when attacked.

Islamist insurgents took up arms in 2007 to drive out Ethiopian troops propping up a Western-backed government which failed to wield control over much of Somalia.