Fighting between Islamic Courts mujahiddeen and Ethiopian occupation forces in Edali in southern Baidoa has resumed on Friday, Al Jazeera's correspondent quoted the Islamic Courts as saying.
The latest round of clashes began early on Thursday near Dinsoor, southwest of Baidoa.
"We are at war with Ethiopia, but not with the so call government," Sheikh Hassan Dahir Aweys, the leader of the Islamic Courts Union said on Thursday.
Aweys' comments came hours after he called the fighting around the puppet "government's" encircled stronghold, Baidoa, "a small incident"
Both sides claimed to have killed hundreds. But there was no independent confirmation of casualties.
The fighting started late on Tuesday, the deadline the Somalia Islamic Courts Council (SICC) had given Ethiopian occupation troops protecting the puppet pro-US "government" to leave the country or face war.
Residents said troops loyal to both sides also appeared to be moving north in what some feared could spell fresh fighting in the town of Galkaayo.
Thursday's shelling seemed to scuttle the shuttle diplomacy by Louis Michel, a European Union aid, on a mission to push the two sides back to the bargaining table.
Aweys blamed Ethiopia for starting the fight: "If we are attacked we are not going to sit back."
Ethiopia remained officially silent on a declaration of war and again denied its combat troops were in Somalia, but has promised "to inform the world" if it decides to attack the SICC.
"These are baseless allegations which Aweys has been saying all along to mislead international public opinion," Zemedhun Tekele, the Ethiopian information ministry spokesperson, said.
Diplomats said it may take days or weeks to decide whether the fighting is actually a war, given the traditionally irregular nature of Somali combat.
One western diplomat described it as skirmishing that could be war "if it keeps coming".
Another said: "It's hard to say. If it stops in a couple of days, I am not going to call it a war.
Military experts say Ethiopia has sent 15,000-20,000 troops into Somalia, while Eritrea has sent about 2,000 to the SICC.
Asmara denies any involvement and Addis Ababa says it has only a few hundred military trainers in Somalia but has vowed to crush any attack against them.
Witnesses in Baidoa said an Ethiopian military helicopter had flown out of the city on Thursday, and an unmarked C-130 airplane believed to be flying surveillance runs circled the dusty trading post that is the puppet "government's" only safe ground
Residents in Mogadishu, seized by the SICC in June, said checks at all major intersections has intensified, with several "technicals" - heavily armed trucks - patrolling the streets in a sign of growing tension.
Meanwhile Kavkaz Center source informed:
Islamic forces Commanders in the frontline report from the newly captured village of Maanya Fuulka on the entrance of Baidoa and he confirmed that he hoped to enter Baidoa in the coming hours as heavy battles intensify in the west of Baidoa in the Dinsoor area. Witness in Dinsoor confirm that captured ethiopian prisoners and vehicles where brought to the town, while in Baidoa witness say that many ethiopian helicopters were seen in the airport taking away their dead and wounded.
Heavy battles are still taking place, Islamic Courts announced that 7 of their soldiers became Shaheed (inshAllah), and 13 wounded, while they say more than 70 ethiopians and puppet solders were killed in this mornings battle.
The head of security of the Islamic courts Yusuf Indh-Ade vowed not to stop the war until the troops reached the ethiopian border.
War is yet to continue until the Islamic Courts reached their stated objective which is to drive out the occupation troops out of the country, this come as yesterday's EU mediated ceasefire broke down in less than an hour after the EU chief departed from Baidoa airport.
More battles to come soon as night falls and the Islamic Courts have full view of the city only couple of miles away.
KC and Agencies
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