By Abdi Sheikh
MOGADISHU (Reuters) - Islamist insurgents fired mortar bombs at Somalia's presidential palace on Wednesday, underlining fears of more bloodshed a day after Ethiopian troops supporting the government quit bases in Mogadishu.
Witnesses said security forces guarding the hill-top palace compound in the capital responded with their own volley of artillery shells, but there was no immediate word on casualties.
Some analysts say the withdrawal of some 3,000 Ethiopian soldiers will leave a power vacuum, triggering more violence by rebels who have battled the U.N.-backed interim administration for two years, and are now increasingly fighting each other.
Others hope it could be positive, removing forces seen by many locals as occupiers and spurring more moderate Islamist factions to get involved in forming a new, inclusive government.
Few Somalis expressed hope for the future.
"No Somali wants the Ethiopians to stay, but there will be chaos whether they withdraw or not," said a spokesman of Ahlu Sunna Waljamaca, a government-allied Sunni Islamist group.
He said hardliners like al Shabaab -- which Washington says has links to al Qaeda -- and militants backed by Somali exiles in Eritrea planned to fight the government and moderate groups like his if they tried to form a power-sharing administration.
Sheikh Hassan Yacqub, an al Shabaab spokesman in Kismayu, a strategic southern port seized by the group in August, said he doubted Ethiopia would withdraw completely from its neighbour.
"If they do pull out it will be due to Islamists' attacks, not requests nor negotiations. We shall continue fighting them until there is no single Ethiopian in Somalia," he told Reuters.
PROGRESS AT TALKS
Speaking in Cairo after talks with Arab League officials, moderate Islamist leader Sheikh Sharif Ahmed said the Eritrea-based opposition group was expected to join talks soon.
"A breakthrough on those issues was achieved. There is a promise that they (the Asmara faction) will be included in the peace process," he was quoted telling Somali Radio HornAfrik.
Fighting has killed more than 16,000 civilians since the start of 2007, when Addis Ababa sent military forces to help the government drive an Islamist movement out of the capital.
One million people have been forced from their homes, triggering a humanitarian disaster that has been worsened by drought and hyper-inflation.
On Tuesday, Ethiopian troops abandoned their main bases in Mogadishu. But many civilians are too scared to return to homes that were rocked by near-daily artillery and gun battles.
Asha Farah, a mother of four, said it was too early to consider taking her children back to their ill-defended home.
"Those who have concrete houses can go back, but there's no hope for families with houses made of iron sheets like us," she said by telephone from a camp for displaced people at Elasha, on the outskirts of the coastal city.
"I don't see any reason for happiness. The ones who have been causing chaos are still alive and perhaps will breed more."
Pitched battles between two rival Islamist factions -- al Shabaab and Ahlu Sunna -- have killed more than 50 people in the central Galgadud region in recent days.
Aid workers say about 50,000 civilians have fled the area, and the U.N. humanitarian agency OCHA says many of those people had already been uprooted once by the fighting in Mogadishu.
Somalia, which Washington fears may become a militant haven, has been mired in conflict for 18 years. A new president is supposed to be elected at U.N.-led talks in Djibouti by January 26.
The African Union (AU) has been desperately trying to strengthen a small peacekeeping mission of 3,500 troops from Uganda and Burundi. But despite pledges of extra battalions from those two nations and Nigeria, they have yet to deploy.
(Additional reporting by Reuters team in Somalia; Writing by Daniel Wallis)
