Thousands of people have fled the Madina district of Mogadishu after government troops and opposition fighters entered the area.
"The residents started fleeing and those remaining are in fear now," Saci Sacdiya Hassan, a resident of the district, told Reuters.
Thousands of people had in recent years moved into Madina, which lies next to the city's airport and had been one of the safest areas of Mogadishu.
AU mission extended
The latest wave of fighting in the Somali capital came on May 7, when opposition fighters started a new offensive against the Transitional Federal Government (TFG) of President Sharif Sheikh Ahmed.
The opposition forces are drawn from loyalists of al-Shabab and Hizbul Islam, an armed group with links to Sheikh Hassan Dahir Aweys Aweys, an opposition leader.
The United Nations Security Council on Tuesday extended the mandate of Amisom, the African Union (AU) peacekeeping mission in Somalia.
The council approved resolution 1872 authorising "member states of the African Union to maintain Amisom until January 31, 2010 to carry out its existing mandate."
The resolution called on the UN to continue to provide logistical support for the force until the end of the extended mission.
John Sawers, Britain’s ambassador to the UN, said the support package would amount to between $200m and $300m.
The AU force is comprised of more than 4,300 Ugandan and Burundian soldiers and its mandate covers protecting key sites in Mogadishu, such as the presidency, the port and the airport.
It is not permitted to fight alongside government forces and can only retaliate if directly attacked.
Somalia has had no effective central government since Mohamed Siad Barre was forced from power in 1991.