Conflict reaches new phase as militants stage an attack on the Horn of Africa nation's presidential palace, killing 2 soldiers and 5 civilians.

According Fars news agency at least six rockets exploded near the presidential palace in the Somali capital of Mogadishu on Tuesday night. Government forces' response to the attacks worsened the situation.

Somali President Sheikh Sharif Sheikh Ahmed blamed Eritrea of supplying the rebels with arms and cash during a press conference on Wednesday.

The African Union (AU) has requested sanctions to be imposed on Eritrea for supporting militant rebels in Somalia.

Meanwhile the UN Security Council extended the AMISOM mandate to keep African Union forces in Somalia.

AMISOM is the African Unions mission tasked with controlling the violence in Somalia. More than 4,300 Ugandan and Burundian troops were deployed in March 2007, that currently protecting strategic sites in Mogadishu.

The Council approved the 1872 resolution to keep AU member states military forces to maintain resolution AMISOM till end of January 2010. The UN will continue to provide logistical support including arms and services till that date.

British ambassador to the UN John Sawers said the logistical support will cost up to 200-300 million US dollars.

This is while, earlier this week the AU had announced that it was not going to send more troops into Somalia.