African bloc calls for U.N. sanctions on Eritrea

* Regional body says Eritrea funds, trains Somali rebels
* Calls on U.N. to impose sanctions, enforce no-fly zone
* Ethiopia again denies troops have crossed border

By Barry Malone

    ADDIS ABABA, May 20 (Reuters) -
    An east African regional bloc called on
    the United Nations on Wednesday to
    impose immediate sanctions on Eritrea
    for backing rebels attempting to
    overthrow Somalia's besieged
    government.

Islamist insurgents, including the hardline al Shabaab group, have gained
ground during two weeks of Somalia's fiercest fighting for months. Local
human rights workers say the clashes have killed at least 175 civilians and
wounded more than 500.

President Sheikh Sharif Ahmed's U.N.-backed administration is the 15th
attempt in 18 years to set up central rule in Somalia. Neighbouring states
and Western security forces fear the nation could become a haven for al
Qaeda-linked extremists.

"The government of Eritrea and its financiers continue to instigate,
finance, recruit, train, fund and supply the criminal elements in and/or to
Somalia," the Inter Governmental Authority on Development (IGAD) said.

"(We call on) the U.N. Security Council to impose sanctions on the
government of Eritrea without any further delay," IGAD said in a
statement after an emergency meeting on Somalia in Ethiopia's capital
Addis Ababa.

IGAD is made up of Djibouti, Ethiopia, Kenya, Somalia, Sudan and
Uganda. Eritrea suspended its membership in 2007.

SEA, AIR BLOCKADE

Somalia's transitional government said on Wednesday the hardline Islamist
rebels had been joined by foreign fighters and had on Tuesday night again
attacked government forces.

IGAD said the United Nations should impose a no-fly zone on the chaotic
country and enforce a blockade of its ports to stop foreign fighters and
arms from bolstering the rebels.

The U.N. Security Council last week said conditions were not right for a
U.N. peacekeeping force to enter Somalia, despite repeated requests from
the African Union.

While there is a small African peacekeeping force in Mogadishu, some
members of the government fear a fully-fledged U.N. force could rally
support to the insurgents, who want to drive foreign troops from Somalia.

Forces loyal to Ahmed now control only parts of the capital Mogadishu
and the country's central region.

Ahmed was chairman of an Islamic group that ran Mogadishu in 2006
before Ethiopian troops, wary of having an Islamist state next door,
ousted them from power. The Ethiopian soldiers withdrew earlier this
year.

Ethiopia's Foreign Minister Seyoum Mesfin denied reports its soldiers had
returned to fight the hardline Islamist rebels.

"We are not back in Somalia," Mesfin told reporters

"We don't intend to go to Somalia unilaterally. We will continue to follow
up developments and do everything possible that this legitimate and
sovereign government of Somalia is supported and assisted," he said after
the IGAD meeting.

Since the Ethiopian intervention, fighting has killed at least 17,700 civilians
and made more than 1 million homeless. More than 3 million people
survive on emergency food aid.

The United Nations refugee agency says 45,000 people have fled fighting
in the capital Mogadishu in the past 12 days.

IGAD Executive Secretary Mahboub Mahlim told the meeting the region
had failed to support properly the ailing Somali government and called the
security situation "very grave".

"This is no longer just a war against Somalia. It is a war against all of us,"
he said. (Editing by David Clarke and Jon Boyle)
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