An Ethiopian military convoy in Somalia has been ambushed by fighters loyal to the powerful Union of Islamic Courts (UIC), witnesses said on Thursday.
The Islamists have made rapid advances this year
It happened on Tuesday 35km south-west of Baidoa, seat of the weak interim government, who deny it took place.
Eyewitness said a truck was blown up and there was an exchange of fire. The UIC claim about 20 Ethiopians died.
Meanwhile, the UN Security Council has urged its members to comply with a 1992 arms embargo imposed on Somalia.
30 Nov 2006: Ethiopia's parliament authorises all legal and necessary steps against any invasion by the UIC
27 Nov 2006: UIC accuse Ethiopian forces of shelling Bandiradley
Oct 2006: Ethiopian's PM says Ethiopia is "technically at war" with the UIC
Sept 2006: Somalia's president survives an assassination attempt
July 2006: Ethiopian troops cross into Somalia
June 2006: UIC takes control of Mogadishu
1996: Ethiopian forces defeat Islamist fighters in Somali town of Luuq
1964 and 1977: Wars fought over Ethiopia's Ogaden region
The council adopted unanimously a resolution condemning what it described as a significant increase in the flow of weapons to and through Somalia.
The decision came as some council members, including the United States, were expected to present a draft resolution calling for a partial lifting of the embargo to allow East African peacekeepers to be deployed in Somalia.
Last week, Ethiopian Prime Minister Meles Zenawi said the Islamists represented a "clear threat" to his country which he said was prepared for conflict following repeated Islamist calls for a holy war.
The UIC, which is backed by Ethiopia's rival, Eritrea, and now controls much of southern Somalia, has denied claims by Ethiopia and the weak Somali transitional government that it has links to al-Qaeda.
The BBC's Mohamed Olad Hassan in the capital, Mogadishu says the ambush was 5km from the military training camp at Manaas.
Ethiopia has denied having thousands of troops backing government forces in Somalia, but has admitted to having hundreds of military trainers there. It has not commented on the incident so far.
It happened the day after the Islamists said Ethiopian forces had shelled the northern town of Bandiradley.
"The Ethiopian convoys were targeted with a remote controlled bomb, then one of their vehicles exploded," said eyewitness Abdullahi Gaafaa who was travelling along the Gedo-Baidoa road in a small car at the time.
He said both sides then opened fire on each other before the Islamic fighters disappeared into the surrounding areas.
Senior UIC member Mohamed Ibrahim Bilaal says about 20 Ethiopian died in the explosion.
Somalia's interim government only controls a small patch of territory around the town of Baidoa.