(adds Somali deputy prime minister)
By Sahal Abdulle
MOGADISHU, April 18 (Reuters) - Renewed fighting between Ethiopian troops and Somali insurgents killed at least seven people in the Somali capital Mogadishu and injured dozens more overnight, residents said on Wednesday.
One said the clashes were as intense as a four-day flare-up at the end of March that killed 1,000 people and sent more than 200,000 fleeing the city.
The insurgents, drawn from a local clan and a militant Islamist movement, are fighting against the Somali government, its Ethiopian military backers, and African peacekeepers, for control of a city in chaos for the last 16 years.
Residents said heavy shelling rocked the southern area of Mogadishu overnight, and some mortars fell close to the presidential palace. Calm had returned by early Wednesday, but war-weary inhabitants braced for more violence.
It was not clear what sparked the latest flare-up.
"Until the forces are separated, this kind of thing will keep happening," said Ahmed Diriye Diriye, spokesman for the city’s dominant Hawiye clan, which is trying to maintain a shaky truce with Ethiopian soldiers who back up the Somali government.
Ethiopian and Somali troops are dug in close to insurgent positions at various flashpoints across Mogadishu.
One resident, who asked not to be named, said he and his friend spent the night at a mosque because they did not feel safe in their homes. "The fighting last night was as bad as the four days’ war," he said. "The only thing missing was the helicopter gunships but the intensity of shelling was the same."
A local reporter said one person was killed in the Bakarah market and another in the Karaan district of north Mogadishu.
"I saw three dead bodies being pulled out of a shelled house," said Abdirahman Bile, resident of Towfiq neighbourhood.
Officials at Dayniile hospital said they had admitted dozens of injured and two children had died.
A mortar also fell through the roof of the Baar Ubax bakery that supplies most of the bread in the city but workers there said no one was injured.
Ethiopian and Somali government troops ousted the Islamist movement — which had Hawiye backing and ruled southern Somalia for the second half of 2006 — from Mogadishu in a brief war over the New Year.
The transitional government is the 14th attempt at establishing central rule since warlords toppled dictator Mohamed Siad Barre in 1991.
In Eritrea, Somalia’s Deputy Prime Minister Hussein Aideed, a Hawiye clan member who appears to have broken with the government, said Somalis needed to meet in a "neutral" venue outside their country to discuss reconciliation.
"No army can stop the battle that is now coming up. But before things get like that, we want a way out," Aideed told reporters in Asmara. The Eritrean government is at odds with Ethiopia and is accused of backing the Islamists. (Additional reporting by Jack Kimball in Asmara)