The US says it is seriously concerned by reports Eritrea is supplying arms to foreign fighters and Islamic hardliners fighting government forces in Somalia, BBC reported.

"This as a disturbing development," President Barack Obama's top official on Africa, Jonnie Carson, told the BBC.

Eritrea denies that any involvement in arming or financing Islamist militants trying to overthrow the government.

Following a week of violence, 100 people are dead and 30,000 more have fled Somalia's capital, Mogadishu.

There have been a number of reports of foreign fighters, with possible links to al-Qaeda, fighting alongside hardline Islamists of al-Shabaab and Hisbul-Islam, said the US Assistant Secretary of State for African Affairs.

Somalia's President Sheikh Sharif Sheikh Ahmed has appealed to Islamist insurgents to negotiate as intermittent fighting continued for an eighth day in the capital, Mogadishu.

But his former ally and Islamist spiritual leader Sheikh Hassan Dahir Aweys has rejected his overture.

He told the BBC talks were not possible while African Union troops were in the city where they are guarding key sites.

On Friday, the United Nations Security Council unanimously approved a statement calling for opposition groups to end their offensive, renounce violence and join reconciliation efforts.

"There is no doubt, from sources overt and covert, that in the attempted coup of last weekend there was significant involvement of foreigners, some from this continent and others from outside this continent," the UN's envoy to Somalia, Ahmedou Ould-Abdalla said.

In recent days there have been suggestions that the Somali government might collapse, but Mr Carson ruled out deploying the American troops currently stationed in neighbouring Djibouti into Somalia.

There would be no case for US forces to engage on the ground, Mr Carson said.

The Somali authorities controls only one major road in the Mogadishu and little else, even this is only with the assistance of about 4,350 African Union troops.