Both Ethiopia and Kenya have sent troops into Somalia to fight Islamist al Shabaab militants, following a wave of cross-border attacks and kidnappings Nairobi blamed on the rebels. "Ethiopian troops are now in Baladwayne town. Al Shabaab fighters have run away," resident Osman Farah told Reuters. Al Shabaab rebels were not immediately available to comment after the reports of the attack, but earlier said they had repelled three Ethiopian assaults north of the town.
"We were woken up by the shells of Ethiopian troops early in the morning. They attacked al Shabaab on the outskirts of the town. We cannot leave our houses. We can see Ethiopian troops from the cracks of our windows," he said. There was no immediate comment from Addis Ababa.
Baladwayne is a commercial and farming town that lies near a river in central Somalia, about 45 km away (28 miles) from the Ethiopian border and 335 km north of Mogadishu. It is also the capital of the Hiiran region and was under the control of al Shabaab, which is fighting Somalia's Western-backed government. Residents fear the militants could retake the town if Ethiopian troops leave.
Somalia has been mired in anarchy since warlords toppled military dictator Mohamed Siad Barre in 1991.
Rebel spokesman Sheikh Abdiasis Abu Musab told Reuters earlier on Saturday Ethiopian troops had attacked al Shabaab fighters 20 km north of Baladwayne. He said al Shabaab had repelled the soldiers three times.
Abu Musab could not be reached for comment after the reports of the attack on the town. Another Baladwayne resident, Hussein Gelle, said the rebels were firing from the outskirts of the settlement.
"Al Shabaab have already fled ... We see clan militia and Ethiopian military vehicles moving to and fro. Al Shabaab is firing sporadically so that they are not run after," he said.
Local elder Hassan Abdi said many residents had fled the town as the warring parties fought on the outskirts. "We do not have details about casualties. No fighting took place in the town itself. The town is calm," he said.
Ethiopian soldiers previously went into Somalia in 2006, and left in early 2009 after pushing the Islamist Islamic Courts Union out of the capital Mogadishu. At the time, most Somalis opposed the intervention and analysts said it may have encouraged people to join the militants. This time, locals say public opinion has largely turned against the militants.
Since Kenya and Somali government troops, backed later by Ethiopian troops, launched the campaign against al Shabaab, there has been little ground fighting.
Several air strikes have hit southern Somalia's regions where al Shabaab remains in control.