(Adds details, edits) By Guled Mohamed MOGADISHU, July 19 (Reuters) - Suspected Islamist insurgents targeted a major reconciliation meeting in Somalia with mortar bombs on Thursday, missing the venue but killing at least five children playing nearby, residents said. Prime Minister Ali Mohamed Gedi told delegates gathered at a former police compound in northern Mogadishu Somalia must redress its reputation as a terrorist haven. "We have lost trust. We need to return Somalia's reputation back to the world," Gedi said in a brief speech. A security source said Gedi left the venue before the mortar attack. "At least six mortars were fired at the conference. They missed their target and hit Shibiz district. At least five children died. There was also an elderly person who died," resident Abdi Aziz Hussein told Reuters. The conference, billed as the interim government's best hope of boosting its legitimacy, had resumed amid tight security after explosions echoed across the capital's biggest market in the heaviest fighting in 15 days of non-stop violence. Suspected insurgents fired rockets, mortars and grenades at Somali forces patrolling the sprawling Bakara Market in central Mogadishu, following up with machinegun fire for nearly an hour. Conference organisers read out a sweeping agenda designed to end 16 years of clan-based anarchy including sharing of national resources, disarmament, and the nature and impact of radical Islam. The talks are set to resume on Saturday. Somali soldiers, backed by Ethiopian troops, blocked all entry points to the conference venue, which was targeted with mortar bombs during an opening ceremony on Sunday before being postponed until Thursday to await missing delegates. Thursday's death toll could not immediately be verified. But Asha Hussein, an aunt of one of the dead children, said a mortar shell detonated near where the youngsters were playing. MORE MEETINGS Diplomats say the Mogadishu peace meeting is the last best hope for the interim government -- a 14th attempt at forging national rule since 1991 -- to win the support it needs to bring peace among Somalia's many factions and clans. "Once this conference ends successfully we will organise another, political conference," Gedi said. Political talks will centre on a roadmap for a federal constitution, creating regional authorities, organising a census and national elections, he said. Formed in late 2004, the government is half-way through a five-year mandate, and critics say it is determined to cling to power. Opponents accuse it of trying to evade serious power-sharing negotiations, saying the reconciliation talks amount to lip service for the benefit of the United States and African Union which has deployed 1,600 Ugandan peacekeepers. Daily attacks involving landmines and assassination attempts against the government and their Ethiopian allies have become a feature of daily life in Mogadishu. Much of the violence has centred around Bakara -- home to one of the world's biggest open-air weapons markets, where one man was killed and a woman wounded when a grenade was hurled at soldiers who retaliated with gunfire late on Wednesday. (Additional reporting by Ibrahim Mohamed)
