Somalia's interim government and Islamists agreed to resume peace talks on Wednesday (December 20) after troops loyal to both sides battled with rockets and heavy weapons at two frontline areas fuelling fears of war. After meeting both sides in a day of shuttle diplomacy, European Union aid chief Louis Michel said the government and Islamists were committed to a political solution to the Somalia crisis that threatens to suck in other regional players. "There is no solution for the Somali's conflict with the military options, the violence will not resolve that conflict, so we have only one way to get out of the conflict is to re-launch the peace process of Khartoum," EU aid chief Louis Michel told a press conference in Nairobi. The talk of fresh negotiations was in stark contrast to two days of clashes that have heightened fears of a Horn of Africa conflict a day after the expiry of an Islamist deadline for government-allied Ethiopian troops to leave. With a battle under way 43 miles southwest of the government's surrounded outpost Baidoa since late on Tuesday (December 19), another clash erupted on Wednesday (December 20) just 15 miles southeast of the town on a strategic part of the frontline. The newest clash took place between the government's forward base in Daynunay and Buur Hakaba, the furthest point where Islamist forces had advanced along the road from their headquarters in the traditional Somali capital, Mogadishu. Many in the region have feared for months the start of a Somali war, which could bring in rivals Ethiopia and Eritrea and trigger suicide bombings in east Africa. The rivals for control of the anarchic nation, in an impasse since power-sharing talks broke down in November, have been perched on the edge of war for weeks across a jagged frontline of mainly scrubby plains. The Islamists accuse Ethiopia, Washington's top counter terrorism ally, of invading Somalia and have threatened holy war against any foreign troops there. Al Qaeda leader Osama bin Laden has publicly encouraged jihadists to join such a war. "They have both reaffirmed all previous agreements reached and endeavour to make sure they implement the commitments immediately, the reason so brought agreement to immediate de-escalation in the military confrontation and cessation of hostilities and to refrain from any hostile act and what is to my opinion the most important, they both decide to resume the Khartoum dialogue process unconditionally. This is very important, with no preconditions, to re-launch the process," Michel added. Military experts estimate Ethiopia has 15,000-20,000 troops in Somalia to back the government, while Eritrea has about 2,000 behind the Islamists. Asmara denies the accusation, and Ethiopia admits only to having a few hundred military trainers in Baidoa.