MOGADISHU - Islamist insurgents captured a key Somali town on Sunday after days of battling to topple the country's fledgling government, dealing a heavy blow to moderate President Sharif Sheikh Ahmed.

The anti-government Islamist fighters seized Jowhar and took full control in just under two hours of heavy fighting, local residents said.

Jowhar, 90 kilometres (55 miles) north of the capital, is President Ahmed's hometown and a strategic location.

A spokesman for Islamist Shebab fighters, Sheik Muktar Robow, pledged to push on after capturing Jowhar until the rebels topple the government.

"The war is never over until the collapse of the so-called government and the full withdrawal of their Christian allies from our country," Robow told reporters in Mogadishu, referring to African Union peacekeeping forces.

He said government troops have "lost and our holy fighters took control of several key places."

The town was taken as militants seeking to topple Ahmed's four-months-old transitional government pounded the capital, Mogadishu, as part of a renewed offensive begun May 7 that has included some of the worst clashes in recent months.

At least four people died in the Jowhar fighting while three were killed in the capital, according to witnesses.

The clashes that began on May 7 have left more than 100 people dead and at least 30,000 displaced in Mogadishu.

"The Shebab forces have taken full control of Johwar," said Ali Moalim Hassan, a town elder, adding that "the other Islamist militia backing the government deserted their positions."

"We are also getting information that the hardline miscreants took control of Jowhar," Transport Minister Mohamed Dhere said in Mogadishu.

Witness and town elder Abdikarim Adan said that Shebab militants heavily armed with machine guns were patrolling the streets.

"They also took control of the police headquarters and we don't see the other opposing fighters. I think they fled," he added.

Both sides used heavy machine guns and anti-aircraft weapons.

Fresh clashes also broke out in the capital Sunday morning in which a police headquarters was hit by mortar shells.

According to witnesses and an AFP correspondent, government forces countered the offensive with heavy artillery shells which hit residential areas.

Dhere said the Mogadishu police headquarters came under attack just before Ahmed was due to visit, forcing the event to be called off.

"Their violent acts will never stop the government from moving towards peace," Dhere said.

Despite the loss of the key stronghold, the government was given a boost by the defection of an Islamist opposition leader on Saturday.

Sheik Yusuf Mohamed Siad, a former ally of hardline opposition leader Sheikh Hassan Dahir Aweys Aweys, arrived unannounced at a government controlled zone with a dozen armoured vehicles and an unspecified number of militants.

"After recognising that the government is the right Islamic one, I have decided to defect from the opposition. From now on I will be working with the government. Everyone of us should defend this government," Siad told reporters in Mogadishu.

Rebel forces consisting mainly of the Shebab, a radical group whose leaders are suspected of links to Al-Qaeda, and Hezb al-Islamiya, another armed organisation loyal to Aweys Aweys, launched an offensive against the government on May 7.

The hardliners who want to topple the moderate Islamist government and to impose Sharia law across the Horn of Africa nation have admitted to receiving support from foreign jihadists.

The UN Security Council has slammed the fresh offensive and voiced concern about reported arms supplies to the Islamists by neighboring Eritrea.

On Saturday, a Security Council delegation said conditions have not yet been met for deploying UN peacekeepers in Somalia.

The United Nations would for now support the 4,000-strong African Union force in Somalia through logistical help, said British Ambassador John Sawers, who led UN delegates' talks with their African Union peers in Ethiopia.