Islamists controlling Mogadishu have vowed to "wage a jihadi war" after Ethiopian troops crossed the border into Somalia.
International observers warned that the country was on the brink of a major conflict that could be as bloody as the civil war 15 years ago which killed 300,000 people.
Ethiopia sent troops to bolster the weak transitional government and threatened to "crush" the Union of Islamic Courts (UIC) if they attack Baidoa, the town where the government is based.
More than 100 Ethiopian army vehicles were seen entering Somalia, and witnesses reported that troops in Ethiopian army uniform were already in Baidoa.
The Ethiopian government has always denied that any of their troops are in Somalia, but last night it was predicted that as many as 5000 Ethiopian troops could have already crossed the border.
The Islamists now control much of southern Somalia after defeating an alliance of US-back warlords in Mogadishu last month.
The interim Somali prime minister, Ali Mohamed Gedi, claimed earlier this week that the Islamists were preparing an attack on Baidoa.
The latest developments come after the UIC moved to within less than 40 miles of Baidoa on Wednesday night local time.
A senior member of the UIC claimed that the group would soon enter Baidoa, but within hours the fighters had retreated, taking with them roughly 150 government troops who had defected.
In response, Ethiopia's Information Minister, Berhan Hailu, said they would use "all means at our disposal to crush the Islamist group if they attempt to attack Baidoa".
Ethiopia's prime minister, Meles Zenawi, is understood to fear an extremist Islamic state on his doorstep.
Sheikh Mukhtar Robow, a senior Islamist in charge of defence, said: "God willing, we will remove the Ethiopians in our country and wage a jihadi war against them."
John Prendergast, of the think-tank, International Crisis Group, said the potential confrontation 'threatens to be as intense as the 1991-1992 civil war that killed 300,000 and provoked the US intervention'.
US troops entered Somalia in 1992 as part of a UN humanitarian mission to bring security to the country.
But in 1993 18 US Army Rangers were killed after two Black Hawk helicopters were shot down and the US swiftly pulled out.
The transitional government, which was set up in neighbouring Kenya in 2004, has been restricted to Baidoa, a town 130 miles northeast from Mogadishu, because it is not safe for them to move.
The government, which is backed by the United Nations, has been unable to bring peace or stability to a country that has been without a functioning government since 1991.
But less than two months after the Islamists took control of Mogadishu, a semblance of law and order has returned.
Security checkpoints, which warlords used to extract money, have been taken down, immediately lowering the price of food. Less people are said to be using armed militias for protection.
However, fears that the Islamic Courts will introduce hardline sharia law remain.
Gunmen have opened fire at cinemas showing World Cup matches and thieves have been stoned to death.
The US, who expressed "grave concern" at the latest developments, believe that the Islamists are sheltering militants linked to Al Qaeda.
- INDEPENDENT
Somali Islamists threaten 'jihadi war' against Ethiopia
AdvertisementAdvertise with NZME.