By Aweys Yusuf and Abdi Sheikh MOGADISHU, Jan 17 (Reuters) - At least 12 people were killed and dozens wounded in heavy fighting in the Somali capital on Thursday in the latest confrontations between Ethiopian troops and Islamist-led insurgents, witnesses said. For more than a year, fighting between insurgents and the interim government backed by Ethiopian forces has plunged the Somali capital into bloodshed, which has seen more than 6,500 killed and 600,000 flee their homes. Residents said several Ethiopian units based in north Mogadishu had marched towards the capital's sprawling Bakara market where insurgents confronted them, prompting fierce gun battles and exchanges of mortar rounds. "I saw two dead Ethiopian soldiers lying in the middle of the road. There were also two Somalis wounded in the crossfire," witness Abdi Ahmed told Reuters by phone. The Somali government and Ethiopia believe Bakara is a hotbed of insurgents, and have routinely attacked it while carrying out sweeps for insurgents. Hassan Abdikafi, a kiosk owner in Bakara, said Ethiopian tanks fired into the crowded market -- the main one in the city. "Four dead people are lying inside the market. I can also see nine wounded people. The Ethiopian forces have occupied Blacksea area and they are firing their tank guns towards the market," Abdikafi said. Mortar bombs killed six more and wounded four, witnesses said. "Two mortar rounds hit two homes next to each other. The first one killed five people from the same family and the other one killed one person, wounding at least four others," resident Sahra Hashi told Reuters. The interim government took over Mogadishu in the last days of 2006 with Ethiopian armour and air power, unseating an Islamist movement that had challenged its authority with a six-month reign over most of southern Somalia. The government has moved back into Mogadishu, but has never fully controlled the city and fighting routinely erupts, with insurgent attacks prompting Ethiopian and Somali troops to assault neighbourhoods regarded as pro-Islamist. (Writing by Aweys Yusuf, Editing by Bryson Hull and Andrew Dobbie)
REFILE - CORRECTING POSITIONING Argentine nurse Pilar Bauza Moreno (R) and Spanish doctor Mercedes Garcia hug after being released by their kidnappers in Bosasso, northern Somalia January 2, 2008. Kidnappers in ...