Somalia's Islamists have accused Ethiopian troops of attacking a town and have vowed a "holy war" in revenge.
Mr Ahmed is seen as the Islamists' moderate voice
The town of Bur Haqaba lies on the road from the government base in Baidoa to the Islamist-held capital, Mogadishu.
Ethiopia denies that its troops have crossed the border but does support the government against the Islamists.
An Islamist leader, wearing fatigues and holding an AK-47, said a "jihad" had been declared on Ethiopia, raising fears of a regional conflict.
"Heavily armed Ethiopian troops have invaded Somalia," said Sheikh Sharif Sheikh Ahmed, seen as a moderate within the Union of Islamic Courts (UIC).
"They have captured Bur Haqaba. History shows that Somalis always win when they are attacked from outside."
Residents of the town, 60km from Baidoa on the main road to Mogadishu, say government fighters backed up by Ethiopians, took the town, before the Islamists recaptured it several hours later.
No fighting has been reported in either takeover - each side withdrew in the face of the other's advance.
The government has not yet commented on the claims.
But an Ethiopian foreign ministry official told the BBC there were "no Ethiopian troops across the border."
"The UIC are using Ethiopia as a pretext to hide their motives behind a curtain."
Earlier, the BBC's Mohammed Olad Hassan in Baidoa saw a convoy of Ethiopian army trucks pass through, with about 200 troops.
Government forces may also be preparing a second front.
Our reporter says troops loyal to the ousted leader of Kismayo, Defence Minister Barre Hiraale are preparing to try and retake the city, which the UIC seized last month.
The UIC control most of southern Somalia, except for a small areas around Baidoa.
Ethiopia, the US and the Somali government all accuse the UIC of having links to al-Qaeda - which it strongly denies.
The UIC controls most of southern Somalia - over the weekend, they set up a new administration in the port city of Kismayo, which they seized last month.
Somalia has not had a functioning national government since 1991.