(Recasts, adds Gedi quotes, background) By Sahal Abdulle MOGADISHU, March 14 (Reuters) - Somalia's prime minister appealed on Wednesday for $32.6 million to fund a national reconciliation meeting in Mogadishu and said the next two weeks would prove if it could secure the violent capital in time. Eight people died on Tuesday when a barrage of mortar bombs launched by suspected Islamic insurgents struck the city's presidential palace. Government forces and their Ethiopian allies then returned fire with artillery, hospital sources said. In a bid to stem the near-daily attacks and cement its authority, the interim government will host a long-awaited meeting of clan leaders, elders and politicians on April 16. On Wednesday, Prime Minister Ali Mohamed Gedi met diplomats in neighbouring Kenya to appeal for money to organise the event, which his administration estimates will cost $32.6 million, according to a document seen by Reuters. "Nobody can deny there are security challenges in the country, and particularly the capital city," Gedi told reporters afterwards. "The next two weeks will be a test for us and allow us to prove how we will organise the conference." The government, still based in its temporary capital of Baidoa in southcentral Somalia, voted overwhelmingly on Monday to move to Mogadishu. Gedi said that process had already started, and parliament would move in about two months. CIVILIANS SUFFER Despite the Ethiopian military presence -- and more than 1,000 African Union (AU) peacekeepers who arrived from Uganda last week -- the city remains one of the world's most dangerous. Mortars rounds crashed into its whitewashed hilltop presidential compound, Villa Somalia, on Tuesday, just hours after President Abdullahi Yusuf returned to the capital amid tight security for the first time in weeks. Eight people were killed and more than 30 injured in the attack and retaliation, hospital staff and residents said. Most blame the insurgency on remnants of a hardline Islamist movement defeated by the government with Ethiopian military help in a two-week war over the New Year. That offensive ended a six-month Islamist reign over most of southern Somalia. Though the attacks are aimed at the government and its allies, civilians are invariably hardest hit by the violence. "Four of my children were injured when a mortar hit our house," said Mogadishu resident Safia Abdirahman. "We are poor civilians. I have been living safely in that house for the last 16 years, the whole duration of the civil war." The Horn of Africa country slid into anarchy after former dictator Mohamed Siad Barre was toppled in 1991, and 13 earlier attempts to create an effective central rule all failed. (Additional reporting by Bryson Hull in Nairobi)
