West African peacekeeping troops who have been supervising a peace process appear to have been unable to halt the clashes in the capital city, Bissau.

Reports say the latest exchanges of fire have been near the presidential palace.

On Thursday, there were heavy exchanges of gun and mortar fire in several areas of the capital.

There are also reports of troop movements close to Bissau airport, which is under the control of soldiers loyal to General Ansumane Mane, who began a rebellion last year.

Rebels demand disarmament

Correspondents say the current tension comes after an ultimatum by General Mane demanding the disarmament of 600 government soldiers guarding the presidential palace.

Soldiers of the West African Ecomog intervention force were attempting to position themselves between the warring factions.

Portuguese radio said weapons from the two rival sides were stockpiled in containers earlier this year, under the supervision of a disarmament commission and the Ecomog forces.

Interim government

President Vieira has been backed by Senegalese troops

Fighting between the two sides last year displaced thousands of people, depleted state finances and destroyed much of the public infrastructure.

The last outbreak of fighting between forces loyal to President Joao Bernardo Vieira and the rebel troops took place in February.

An interim government of national unity has been sworn into office in Guinea-Bissau under the terms of a peace accord signed last November.

The new 10-member government - which includes representatives of President Joao Vieira and rebel soldiers who mutinied last year - will lead the West African nation until elections later this year.

The peace deal halted a five-month war between the rebels, who have broad popular support, and the mostly Senegalese troops supporting President Vieira who has ruled the former Portuguese colony since 1980.