JOWHAR, Somalia - Islamist insurgents closed in on Somalia's coastal capital after seizing another strategic town north of Mogadishu Monday.

President Sheikh Sharif Ahmed's forces control only parts of the city and central region after two weeks of fighting. Human rights workers in the Horn of Africa nation say the clashes have killed at least 172 civilians and wounded 528.

Ahmed's U.N.-backed administration is the 15th attempt to set up central rule in Somalia, which has been in anarchy for 18 years. Neighboring states and Western security forces fear the country could become a haven for al Qaeda-linked extremists.

Hardline al Shabaab rebels seized Jowhar Sunday and witnesses said hundreds of gunmen from another insurgent group -- Hizbul Islam -- marched into nearby Mahaday Monday and took control without firing a shot.

We have captured the town peacefully, Hassan Mahdi, Hizbul Islam's spokesman, said by telephone.

There was heavy fighting, however, between the hardline rebels and the more moderate Ahlu Sunna Islamists in the central town of Wahbo, the scene of fierce clashes late last week.

We attacked al Shabaab in the corner of Wabho and killed 20 including a foreigner, Sheikh Abdullahi sheikh Abu Yussuf, spokesman of Ahlu Sunna Waljamaca told Reuters.

Jowhar, 90 km (60 miles) from Mogadishu, is Ahmed's hometown and links the capital to Somalia's volatile central region. Mahaday is 23 km (14 miles) north of Jowhar.

Masked Islamists are on the streets, resident Fatima Hussein told Reuters. They are not speaking to anyone ... there was no fighting, the pro-government forces left last night.

ETHIOPIA WATCHING CLOSELY Officials in Ahmed's administration could not immediately be reached for comment.

Ahmed was chairman of the Islamic Courts Union that ran Mogadishu in 2006 before Ethiopian troops, wary of having an Islamist state next door, invaded and ousted them from power.

Since the Ethiopians intervened, fighting has killed at least 17,700 civilians and driven more than 1 million from their homes. More than 3 million people survive on emergency food aid.

The Ethiopian troops pulled out of Somalia at the start of this year, but hardline Islamists carried on attacking the new government and African Union peacekeepers in the capital.

We are following the situation closely but we feel the problem is contained within Somalia. At this point there is no present and immediate danger to Ethiopia that would prompt our intervention, Bereket Simon, the Ethiopian government's head of information told reporters.

We still have information that al Shabaab are not able to penetrate central Somalia and are not accepted by the clans that live around central Somalia, he said.

In the central town of Mahas, witnesses said Shabaab fighters beheaded a local elder and burned his body Sunday.

We have carried his bones and some of his burned flesh and had a burial this morning, resident Ahmed Farah told Reuters.

They always do this when they want to terrorize residents.

Somali pirates have taken advantage of the chaos to launch ever bolder attacks on shipping. Nearly 30 hijackings this year have put it on course to be the worst ever.

The bloodshed has also forced many Somalis to flee west across the porous, desert border into Kenya.

Medecins Sans Frontieres (MSF) said Monday more than 270,000 refugees in Kenya were facing such alarming shortages of food, water and adequate shelter in overcrowded camps that many were considering returning to the Somali war zone.