Islamist warlords have announced that that they have taken control of Mogadishu, the capital of Somalia, after weeks of the worst fighting in a decade.

Around 350 people are believed to have been killed and 1,700 injured in street-by-street gun battles across the capital since February.

Gun and bullet prices have risen dramatically as Islamist militias have sought to drive out fighters loyal to a secular "counter-terrorism" alliance that is rumoured to have the support of the US Government.

After a tentative ceasefire between the two sides broke down last week, Islamist militants have taken over a series of neighbourhood headquarters, garages and buildings, used by their rival warlords, and have taken their campaign out of the city, with violence spreading to surrounding towns.

Islamist commanders declared their apparent victory this morning in a series of public meetings and radio broadcasts in the city.

"We want to restore peace and stability to Mogadishu. We are ready to meet and talk to anybody and to any group for the interest of the people," said Sheik Sharif Sheik Ahmed, the leader of the Islamic Courts Union, in a radio broadcast.

Sharia courts, enforcing Islamic law, have won a measure of public support in Mogadishu as a force for order in a city that has been in anarchy since the fall of the dictator Mohamed Siad Barre in 1991 and the subsequent collapse of the US mission to the country in 1994.

Islamic groups and charities have also built schools and hospitals, bringing a measure of relief to those stuck in the poverty and danger of a capital that is too dangerous for Somalia's UN-supported government even to visit.

But the US Government is concerned that city has become a haven for militants and groups sympathetic to al-Qaeda, giving terrorists a staging post in the Horn of Africa for attacks in the Persian Gulf and Middle East.

Many of the perpetrators of the 1998 US Embassy bombings in Nairobi and Dar es Salaam are believed to be in hiding in Somalia and US officials also fear the development of a Taleban-style African state.

The deteriorating situation in Mogadishu led to a report by the UN's monitoring group in Somalia to the UN Security Council in April, which accused an unnamed country, widely believed to be America, of routinely flouting a UN arms embargo to intervene in the fighting.

The target of US support is believed to be a group of secular warlords, who formed the Alliance for the Restoration of Peace and Counter-Terrorism (ARPCT) in February.

Today, ARPCT leaders appeared to have to gone to ground, with rumours that some militia commanders had fled to Djibouti while others remained in Mogadishu to try and strike a deal with their Islamist counterparts.

The breakdown in order in Mogadishu has run parallel to the attempts of Somalia's fledgling Transitional Federal Government to gain international support.

Last night, Ali Mohamed, the Interim Prime Minister, called an emergency Cabinet meeting to discuss the violence and to put the Government forces on full combat alert.

According to a statement from the Somali Ministry of Information and Public Orientation today, the Government also agreed to negotiate with the "uprising public societies in Mogadishu such the Islamic court unions", although the body is known to oppose making Somalia an Islamic state.

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