Mortar bombs crashed into central Mogadishu on Sunday and Uganda said it had lost its first peacekeeper there as battles pitting Ethiopian and Somali troops against Islamist insurgents raged for a fourth day.

Despite reports clan elders fighting alongside the rebels had brokered a truce with the Ethiopian military - the second in as many weeks - there was no-let up in clashes that have killed scores of civilians and wounded hundreds more.

The International Committee of the Red Cross has called it the seaside capital's worst violence for more than 15 years.

Ethiopian tanks and helicopter gunships pounded insurgent strongholds as Islamists and clan militia fired back with machineguns, missiles and rocket-propelled grenades.

Ugandan peacekeepers sent last month at the head of an African Union (AU) force to help Somalia's interim government restore stability have been caught in the crossfire, pinned down at strategic sites, including the air and sea ports.

"Our troops were guarding the presidential compound on Saturday when it was struck by mortars. One of our soldiers was killed," Ugandan military spokesman Major Felix Kulayigye told Reuters by telephone from Kampala. Five others were injured.

Previous ambushes by insurgents that wounded two Ugandans had already made other African states wary of flying in more men to boost the AU force to its planned strength of 8,000. Burundi, Malawi, Ghana and Nigeria have pledged to send troops.

Fighting broke out on Sunday with a barrage of artillery shells striking residential neighbourhoods around the main soccer stadium - the site of some of the heaviest fighting since the Ethiopian offensive was launched on Thursday.

Thousands of people have fled the city.

"We are now being shelled heavily," one resident, who asked not to be named, said on Sunday. "People are very scared."

Civilians were the main victims. Hospitals were overwhelmed, although most wounded were unable to seek help and doctors were also trapped at home because of the ongoing battles.

The fighting shattered a brief and shaky truce between the Ethiopians and leaders of the city's dominant clan, the Hawiye.

Despite reports some Hawiye elders had negotiated a new truce with the Ethiopians on Sunday, there was no confirmation of that, and heavy shelling continued throughout the day.

Security sources said the African Union (AU) was trying to arrange more talks between the two sides to reinstate a ceasefire, but was facing massive mutual mistrust.

The Hawiye demanded the United Nations, United States, European Union and Arab League urge Ethiopia to stop attacking.

"What is happening in the city is total carnage against the civilians," a clan spokesman was quoted as saying on the Web site of independent Somali broadcaster Shabelle.

Ethiopia says its military has killed more than 200 "armed remnants" of an Islamic sharia courts group that it helped the government chase out of Mogadishu in a war over the New Year.

On Friday, insurgents shot down an Ethiopian helicopter gunship with a missile. Several dead Ethiopian soldiers have been dragged through the streets and burnt by mobs.

While Addis Ababa seems determined to finish off the rebels, many experts say the attacks could have the opposite effect, turning Somalis further against their Christian-led neighbour, or drawing in foreign Muslim jihadists.

Despite the fighting, Somalia's interim government remains confident a reconciliation meeting of elders, politicians and former warlords planned for April 16 will go ahead in the city.

The administration is the 14th attempt to restore central rule in Somalia since 1991, when the Horn of Africa nation slid into anarchy after dictator Mohamed Siad Barre was overthrown.