They said fighting was triggered when forces allied to the Islamic courts tried to pass a newly-established checkpoint held by militiamen linked to the Mogadishu Anti-Terrorism Coalition, an alliance of powerful warlords.
The same factions were behind clashes that killed up to 90 people last month.
"We're escaping from the new clashes in Hamarweyne district," said Haji Abdi Yusuf, 56, running down a road.
Frightened locals said they could still hear gunfire and many were afraid it would spill to neighbouring districts.
"The fighting will spread to new areas, unless there is a quick ceasefire," resident Hassan Mohamed told Reuters.
Analysts say the upsurge in street battles between the two sides suggests the failed Horn of Africa state is becoming a new proxy battleground for Islamist militants and the United States.
Washington has long viewed Somalia as a haven for terrorists and many Somalis believe it funds and equips the warlord alliance.
The U.S. government denies the charge but the widely held perception prompted Islamist hardliners to confront the warlord forces hours after the coalition was formed in February, in a fight that killed 37 people.
Many residents say the Islamic courts, which have created a semblance of order in lawless Mogadishu by providing justice under sharia law, want to fight any move to undermine their authority in the city of 1 million.
Reports that re-armed fighters from both sides have moved to strategic positions have fuelled fears of worse to come.
Somalia descended into lawlessness in 1991, when warlords ousted military dictator Mohamed Siad Barre.
The fighting in Mogadishu shows how little control a fledgling government formed in Kenya in 2004, but weakened by internal power struggles, has over the nation of 10 million.
On Saturday, Somali lawmakers voted to seat the government, which hitherto had no fixed location, temporarily in the southern city of Baidoa. President Abdullahi Yusuf has long argued that Mogadishu, where he is an outsider, is still too dangerous to host the government.
Source: Reuters, April 23, 2006
The opinions contained in this article are solely those of the writer, and in no way, form or shape represent the editorial opinions of "the Center for Peace and Democracy in Somalia (CPD)"