Mortar rounds slammed into central Mogadishu as heavy fighting in the Somali capital between troops and rebels continued into a fourth day.
Dozens have been killed since fighting flared on Thursday
The Red Cross says dozens of civilians have been killed and local hospitals say they cannot cope with the hundreds of wounded being brought in.
The transitional government, backed by Ethiopian troops, has launched an offensive against Islamist militias.
A Ugandan soldier was killed, the first casualty among AU peacekeepers.
About 1500 Ugandan soldiers arrived in Mogadishu last month, the first contingent of an African Union force that is meant to eventually number 8,000.
The force is meant to take over from the Ethiopian army in helping the interim government restore order.
"Our troops were guarding the presidential compound on Saturday when it was struck by mortars," Major Felix Kulayigye told Reuters news agency.
"One of our soldiers was killed."
Ethiopian tanks and helicopter gunships are hunting Islamist rebels who are hitting back with machine-guns, mortars and rocket-propelled grenades.
Ethiopian troops launched their offensive on Thursday. On Friday, one of their helicopters was shot down by a rebel missile.
Thousands of people have fled the city.
Sunday's fighting began with a barrage of mortar rounds hitting neighbourhoods near the main soccer stadium - already the scene of heavy fighting in the last few days.
"We are now being shelled heavily, people are very scared," one resident told Reuters.
The number of wounded and killed is unknown
Residents have reported that shops and markets are shut and there is nowhere to buy food.
The Red Cross says it is the worst fighting in Mogadishu in more than 15 years.
On Saturday, doctors at the two main hospitals said they had received 380 casualties since Thursday.
The fighting has been so heavy and widespread that many bodies can not be picked up and many wounded people are unable to reach the hospitals.
The Union of Islamic Courts seized Mogadishu last June after gaining control of much of southern Somalia.
With Ethiopian backing, forces loyal to the interim government defeated the Islamists at the end of 2006 and President Abdullahi Yusuf entered Mogadishu for the first time since taking office in 2004.
Ethiopian forces say they are trying to root out the remnants of the militias supporting the Islamist movement.
African Union officials are reported to be trying to reinstate the brief and shaky ceasefire between the Ethiopian forces and the rebels, who are backed by the main clan in Mogadishu.
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