Heavy shelling is taking place as Ethiopian-backed government forces battle insurgents in Somalia's capital.
The fighting has raged for six days
Ethiopian tanks have been pursuing Islamists and local militias into their stronghold in the north of Mogadishu.
The United Nations refugee agency says many residents are trapped in the fighting as roads leading out of Mogadishu have been blocked.
Meanwhile, there has been heavy fighting between rival clans in the southern port town of Kismayo.
Fighters from the Marehan clan have taken control of the town in what correspondents say is a big blow to the government.
A BBC reporter in the town says 15 people have died and 13 injured in two days of clashes.
Some 250 people have been killed during the last six days of fighting and thousands are fleeing Mogadishu.
Somalia's deputy defence minister Salad Ali Jelle has asked people living near insurgent strongholds to move out before a planned attack on the rebels.
Ethiopian forces have been in Mogadishu since December last year after helping Somalia's transitional government oust the Union of Islamic Courts (UIC).
Ethiopians arrived in December to help the transitional government
The insurgents are believed to be a mixture of Islamists and militiamen from the Hawiye clan - the largest in Mogadishu.
Many bodies are lying around Mogadishu and hundreds of people are fleeing towards the Kenyan border, says the BBC Swahili reporter Khadra Mohammed.
Some have serious injuries and need urgent medical attention, she says.
Only people with money are able to move out of the capital on public transport vans, most of the dead are poor people, our correspondent says.
UNHCR spokesperson Catherine Weibel has told the BBC they are now providing relief supplies to about 20,000 displaced people out of the more than 300,000 who have fled the violence.
Eritrea which is accused of supporting insurgents opposed to the Somalia's transitional government has suspended its membership from the Inter-Governmental Authority on Development (Igad), the East African regional body that brokered the Somali peace process.
The withdrawal from the seven-member Igad group was the latest sign of deteriorating relations between Asmara and regional countries over Somalia.
"It's a temporary withdrawal. We feel that it's not responsible to stay in that organisation when decisions are being made that are not legally or morally acceptable," Information Minister Ali Abdu told Reuters News Agency.
An Eritrean representative at the recent Igad meeting held in Kenya's capital, Nairobi, clashed with his Ethiopian counterpart over their presence in Somalia.
Eritrea has denied accusations from Ethiopia and America that it is supplying arms to insurgents opposed to the transitional government.
Somalia has not had a functional government since 1991. A transitional government was formed in 2004, but has so far failed to take full control of the country.
Ethiopian troops have started to withdraw, to be replaced by an African Union peacekeeping force, but only 1,200 of the 8,000 troops the AU says it needs have been deployed.