The attacks in the capital and the south-central town hosting Somalia's parliament came after two days of fighting in Mogadishu between allied Somali-Ethiopian forces and Islamist insurgents.

"A remote-controlled roadside bomb targeted a military pick-up truck," said police officer Aden Moalim in Baidoa. "At least 12 soldiers guarding the road to parliament, including one Ethiopian, were hurt."

In the capital, two people were killed when grenades were hurled at government troops patrolling Bakara Market, triggering a gun battle.

A local journalist who asked not to be named said he saw the insurgents execute one captive during the clash while the second victim was killed in crossfire.

"I and a few other people witnessed the killing of a blindfolded man who was shot dead by six young men armed with pistols," the journalist said. "Some people were saying the man was suspected of spying for government forces."

A police spokesman said several weapons caches had been seized since Friday during government operations in Bakara, which contains an open-air weapons bazaar.

Four suspected insurgents were killed on Friday after being seen firing mortars, he said, and several others were arrested.

FOREIGN JIHADISTS

At least 25 people have been killed in the capital since Thursday when mortar bombs damaged parts of Bakara and sustained fighting broke out in other parts of the city.

Many Somalis say the insurgents -- remnants of a hardline sharia courts groups chased out of the city a year ago -- have become increasingly confident in recent months while the interim government has been hobbled by infighting.

The government says the rebels are backed by 4,500 foreign jihadists from Afghanistan, Chechnya and the Middle East.

Fighting in Mogadishu has killed nearly 6,000 civilians this year and uprooted some 720,000 more, a local rights group says. The United Nations says the humanitarian crisis in Somalia is Africa's worst.

Many Somali opposition figures are based in Eritrea, where a senior official of the Alliance for the Re-Liberation of Somalia (ARS) said the Somali government and its Ethiopian backers were using the threat of international terrorism to justify the continued presence of Ethiopian troops.

"It's just a trick to prolong their stay," Ibrahim Yusuf, ARS' secretary for foreign affairs, told Reuters in Asmara.

He also dismissed a report that joint Somali-Ethiopian forces had killed 75 insurgents on Thursday in a surprise attack.

"The reality has come to everyone that this is a false accusation and a fake story," Yusuf said. (Additional reporting by Ahmed Mohamed in Baidoa and Jack Kimball in Asmara; Writing by Daniel Wallis; Editing by Janet Lawrence)

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