NAIROBI, Dec 21 (Reuters) - Somali Islamists and their Ethiopian-allied government rivals shelled each other for a third day on Thursday, a day after a European Union envoy said the two sides had agreed to new peace talks. Deputy Defence Minister Salad Ali Jelle said heavy fighting broke out in the morning near Dinsoor, 100km (62 miles) southwest of the government's surrounded stronghold, Baidoa. A resident confirmed the fighting by telephone to Reuters.
