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MOGADISHU - Ethiopia said on Tuesday it was halfway to crushing Somali Islamists as its forces advanced on the religious movement's Mogadishu stronghold after a week of war in the Horn of Africa.

Somalia's envoy to Addis Ababa said Ethiopian troops were within 70km of the capital and could capture it in 24 to 48 hours.

Islamists countered that they were ready for a long war and any attempt to oust them would prove disastrous for their foes.

The Red Cross said more than 800 people had been wounded and thousands were fleeing the combat zone, with the United Nations saying the displacement could trigger an aid crisis in a region where relief resources are already stretched.

Ethiopian Prime Minister Meles Zenawi said his forces supporting Somalia's weak interim government had killed up to 1,000 Islamist fighters. There was no independent verification of that. The Islamists also say they have killed hundreds.

"We have already completed half our mission, and as soon as we finish the second half, our troops will leave Somalia," Meles told a news conference in the Ethiopian capital.

"We will not keep a single fighter in Somalia once our mission getting rid of the terrorists is completed."

He said a force of between 3,000 and 4,000 Ethiopians had "broken the back" of the Somalia Islamic Courts Council (SICC) around the government's south-central base Baidoa, and the Islamists were now in "full retreat".

Ethiopia backs Somalia's secular interim government against the Islamists who hold most of southern Somalia after seizing Mogadishu in June. Addis Ababa and Washington say the Islamists are backed by al-Qaeda and by Ethiopia's enemy, Eritrea.

The Islamists claim broad popular support and say their aim is to restore order to Somalia under sharia law after years of anarchy since the 1991 ousting of dictator Siad Barre.

Addis Ababa fears a hardline Muslim state on its doorstep and accuses the SICC of wanting to annex Ethiopia's ethnically Somali Ogaden region.

The African Union has backed Ethiopia's right to intervene. Diplomats say that, allied to Washington's tacit support, may embolden Meles to try to seize Mogadishu.

SICC spokesman Abdi Kafi said any attempt by Ethiopian forces to take Mogadishu "will be their destruction and doomsday".

The diplomats said the fighting could now draw in Eritrea. They added that Kenya, which is taking in Somali refugees across its north border, was trying to broker ceasefire talks.

Meles said his forces' main target now were Eritrean troops and foreign jihadists. He said a handful of Islamist prisoners taken on the battlefield were holding British passports.

And as the threat of a wider regional conflict loomed, the UN Security Council called an emergency meeting for a briefing by Secretary-General Kofi Annan's special envoy on Somalia.

President George W Bush also spoke to Uganda's President Yoweri Museveni by telephone, a White House spokesman said.

US State Department spokesman Gonzo Gallegos told a briefing in Washington: "Ethiopia has genuine security concerns with regard to developments within Somalia and has provided support at the request of the legitimate governing authority."

He said Washington had urged it to exercise "maximum restraint".

US ambassadors in the region are urging governments to use their contacts with Somalis to urge the warring factions to return to talks, he said.

At least two Ethiopian jets fired missiles on retreating Islamist fighters on Tuesday shortly after pro-government forces recaptured two towns near Baidoa. It was the third day of Ethiopian air attacks in the escalating conflict.

"Over 800 war wounded have arrived at the various medical structures around Baidoa and Mogadishu is the last few days," said Antonella Notari, spokeswoman for the International Committee of the Red Cross.

"Thousands of people are fleeing the combat areas."

UN High Commissioner for Refugees Antonio Guterres said: "The last thing we and the people of Somalia need is yet another round of massive displacement."

The Islamists said the retreat was a tactic in what they vowed would be a long war. "We will fight to the last man until we ensure there are no more Ethiopian troops in our country," Kafi said.

Analysts say Ethiopia's heavy arms and MiG jets saved the Somali government from being routed.

"This is the first stage of victory ... When this is all over, we will enter Mogadishu peacefully," government spokesman Abdirahman Dinari said by telephone from Baidoa.

- REUTERS