Members of Somalia's interim parliament say they intend to travel to Sudan for more peace talks with Islamic courts that control the capital, Mogadishu.
Ghedi is looking increasingly isolated
Over 30 ministers resigned recently over Prime Minister Ali Mohamed Ghedi's reluctance to talk to the Islamists.
At the same time, Ethiopian Prime Minister Meles Zenawi has denied his country has sent troops to Somalia.
The Islamic courts have refused talks with the government as long as Ethiopia has soldiers in Somalia.
"I have heard of these reports but I reaffirm categorically that we do not have troops in Somalia," Mr Meles said in a BBC interview.
Mr Meles said though that all African states had a duty to assist the Somali government if it felt threatened by the Islamists.
He said the Union of Islamic Courts in Mogadishu had been taken over by extremists who wanted to establish Islamic rule throughout the Horn of Africa region, something Ethiopia would not accept.
Militia loyal to the Islamic courts control Mogadishu
Mr Meles also accused Eritrea of secretly arming the Islamists, but denied that Ethiopia and Eritrea were fighting a proxy war in Somalia.
Ethiopian troops were seen two weeks ago in the Somali town of Baidoa, where the transitional government is based.
Diplomats have also said that Mr Meles had privately acknowledged the presence of Ethiopian troops on Somali soil.
Calls for dialogue
The leader of the Supreme Council of the Islamic Courts in Mogadishu, Sheikh Hassan Dahir Aweis, said his militia would welcome the resigned ministers to join what he described as the Islamic courts' common endeavour for peace and a better future for the country.
"I appreciate the steps taken by the cabinet members," he said in an interview broadcast by the local Shabelle radio station.
"They felt how badly the prime minister is behaving and that is what caused the ministers to resign" he added.
The prime minister met ministers and loyalist MPs on Wednesday, and Information Minister Mohamed Abdi Hayir Mareye said a committee had been set up to try to resolve differences within the government and parliament.
"The government has democratically survived a motion of no confidence and yet trouble continues to destabilise the government," Mr Mareye said.
"We will try to solve everything through peaceful dialogue to survive the only hope and government for Somalia after more than a decade of anarchy" he said.
Correspondents say Mr Ghedi appears increasingly isolated since his decision to postpone the talks with the Union of Islamic Courts (UIC), whose militia groups control much of southern Somalia as well as the capital.
Fisheries Minister Hassan Abshir Farah, who was among the latest group of ministers to resign, said the prime minister's decision was unacceptable.
"We had no option but to resign because we believe if the talks are postponed again it will affect the reconciliation efforts," Mr Farah told Reuters news agency.
Since late last week about 40 ministers have left a government that once had more than 100 members, and Prime Minister Ghedi narrowly survived a parliamentary vote of no confidence on Saturday.
The latest resignations came as ministers from the regional body, the Inter-Governmental Authority on Development (Igad), met in neighbouring Kenya to try to resolve the crisis in Somalia.
The ministers "called upon all member states to exercise restraint and ensure that their actions do not jeopardise the Somalia peace process," a joint statement said.
Igad was expected to look into easing an arms embargo so that a peacekeeping force could be deployed.
But the Islamic Courts reject proposals for foreign troops in Somalia.
Two Igad states - Ethiopia and Eritrea - are accused by rival Somali factions of meddling in the country.
Somalia has been without an effective central government since warlords toppled dictator Mohamed Siad Barre in 1991.
Since then much of the country has been ruled by violence and clan law.