Shelling between Somali rebels and government forces near the presidential palace have killed at least 12 people.

Rebels who want to install an Islamic state in the east African country and the transitional government blamed each other for instigating the violence.

‘It was a very gruesome scene,’ said Sahra Abdulle, a resident who saw bodies in the streets and wounded people running from mortar shells.

A surge of violence started in May in the capital of Mogadishu, killing about 200 people and forcing tens of thousands to flee.

More than 4,000 African Union peacekeepers are in Somalia, but generally only protect government installations.