Fears of war in the Horn of Africa grew sharply yesterday after Ethiopia sent troops into Somalia to "protect" its neighbour's fragile government against an advancing Islamist militia.

Dozens of Ethiopian military trucks and armoured vehicles were seen closing in on Baidoa, the seat of Somalia's interim government, which has no army of its own. Journalists reported seeing hundreds of Ethiopian troops patrolling the town yesterday.

The move appeared to be a direct challenge to the Supreme Islamic Council of Somalia, which controls the capital Mogadishu and much of the south. On Wednesday, its fighters advanced to the town of Buurhabaka, 40 miles from Baidoa. The military movements came as both sides stepped up their verbal battle.

While denying the widely reported incursion, an Ethiopian government spokesman vowed to crush any attempt to topple President Abdullahi Yusuf's secular interim government, which enjoys close ties with Addis Ababa.

Meanwhile, Sheikh Mukhtar Robow, the Islamists' deputy head of security, warned that his fighters were ready to take on the foreign troops. "God willing, we will remove the Ethiopians in our country and wage a jihadi war against them."

The direct involvement of Ethiopia, which has been repeatedly accused of crossing into Somalia in recent weeks, represents a dangerous turn of events.

Tensions within Somalia were already strained by the on-off talks between the weak government, which has no control outside Baidoa, and the Islamists, who defeated a coalition of US-backed warlords in Mogadishu on June 5 and have steadily spread their influence across the country.

Representatives of the two parties met in Khartoum last month and agreed to recognise each other, even if their differences remained wide. The government wants an arms embargo lifted and regional peacekeepers deployed. The Islamists, who want to impose some form of sharia law, are vehemently opposed to foreign troops - as are many Somalis, particularly in Mogadishu.

But a second meeting planned for last weekend was boycotted by the government after it accused the Islamists of breaking a ceasefire agreement by fighting a bloody three-day battle to rout the last remaining warlord in Mogadishu.

Relations appeared to break down completely on Wednesday when the prime minister, Ali Mohamed Gedi, accused the militia of plotting to overthrow the government by force.

His comments, which were denied by the Islamists, raised immediate alarms in Addis Ababa, and are likely to have prompted the incursion.

The invasion is not without precedent: Ethiopia twice crossed into Somalia, in 1993 and 1996, to crush attempts by Islamists to establish control.