Somali President Abdullahi Yusuf has urged residents in the capital, Mogadishu, to join government forces in fighting Islamic insurgents.
Somali's interim president is holding crisis talks in Nairobi
He blamed the violence on the al-Shabab militant group and said if residents do not support the crackdown, they risk getting caught in the crossfire.
Some 80 people have been killed during the recent clashes between insurgents and Ethiopian backed government troops.
The UN says about 170,000 people have fled Mogadishu in the past two weeks.
Ethiopian and Somali government forces have been carrying out door-to-door searches for insurgents near the main Bakara market in the capital, believed to be their stronghold.
"My government is doing all it can to save lives but people in the neighbourhood must also fight the al-Shabab militants hiding among them," President Yusuf told a news conference in Nairobi.
Somali's interim president has been holding talks with foreign diplomats in the Kenya capital on the crisis in his country.
Civilians accuse the Ethiopian forces of engaging in indiscriminate shooting resulting in hundreds of casualties.
But President Yusuf denied the claims saying the forces were only targeting the insurgents.
"When two elephants fight, it is the grass that suffers," President Yusuf said.
Meanwhile, UN special envoy to Somalia Ahmedou Ould-Abdallah has warned that the crisis in the country is worsening.
Mr Abdallah said the situation was the worst on the continent with thousands of internally displaced families living in extremely harsh conditions.
Many residents have fled to Afgooye
The UN's refugee agency, UNHCR, says it has emptied its warehouse in the capital and is transferring supplies to Afgooye just outside the capital where more than half the fleeing families have gathered.
The UN agency however complained that pro-government militias are frustrating their efforts by demanding up to $300 at checkpoints before allowing the aid through.
UNHCR spokesman Ron Redmond said people in Afgooye were in a desperate situation.
"People can no longer find space for shelter around the town itself. Many families are simply living under trees."
He said that water being trucked to the sites is not enough to meet demand and people were having to wait in line for up to six hours for 20 litres of water.
The BBC's East Africa correspondent Karen Allen says its is unclear what will happen when the last supplies of aid in Mogadishu are exhausted.
It is hoped that more will be able to come in from Kenya, she says, but UN aid agencies say it is simply too dangerous to work inside Mogadishu.
That leaves those left there with virtually no help at all, our reporter warns.