Ethiopia denies reports troops in Somalia

By Abdi Sheikh and Abdi Guled

MOGADISHU (Reuters) - Ethiopia denied reports from Somali residents and media on Tuesday that it had sent soldiers back into the neighbouring Horn of Africa country, where hardline Islamist rebels are battling Somalia's government.

Ethiopia invaded in late 2006 to help the interim Somali government topple an Islamist movement controlling the capital and much of the south, but withdrew its troops this year.

"This is a totally fabricated story. We have no plans to go into any of Somalia's territory," Wahade Belay, spokesman for Ethiopia's Foreign Ministry, told Reuters in Addis Ababa.

Citing witnesses in the area, all the main Somali language websites and radio stations were on Tuesday running stories saying there had been an Ethiopian incursion.

On Monday, Ethiopia said it was watching events closely but felt the situation was contained within Somalia and that there was no immediate danger that would prompt intervention.

Residents near the central town of Baladwayne said Ethiopian troops in military vehicles arrived before dawn on Tuesday.

"Some of their soldiers were on the hills ... We do not know what they want. They have not spoken to anyone," local man Hussein Osman told Reuters by telephone.

"We believe they are concerned about the al Shabaab (rebels) flowing into our region."