Bodies littered this strategic port in southern Somalia and unidentified planes soared overhead yesterday, a day after it was seized by Islamist rebels in fighting that killed at least 70 people.

The loss of Kismayu to the al-Shabaab insurgents was another blow for Somalia's interim government, which signed a peace deal with some opposition figures last week that has only seemed to stoke violence in the Horn of Africa nation.

"We are now collecting the corpses lying in the streets," resident Mohamed Farah, 55, told Reuters.

"The town is calm today and we're busy burying the victims of the fighting. The Islamists are at the abandoned sea and air ports, and people here are hoping to reopen their businesses."

Since the start of last year, al-Shabaab rebels have been waging an Iraq-style insurgency of mortar attacks, roadside bombings and assassinations, targeting President Abdullahi Yusuf's administration and its Ethiopian military allies.

Underlining the insecurity, residents and a security source said gunmen kidnapped two Western journalists, an Australian man and a Canadian woman, at Elasha near Mogadishu yesterday.

"They left us this morning to visit internally displaced camps ... now they are nowhere to be found," said Mohamed Ajos, head of security at the capital's Shamo Hotel, where the pair were staying.

"They are believed to have been kidnapped."

A spokesman for Somali opposition hardliners based in Eritrea congratulated the insurgents on seizing Kismayu.

"We'll continue our war against militiamen and all troops until we rule the whole country by Islamic law," said Ismail Adow of the Alliance for the Re-Liberation of Somalia.

"God willing, we shall establish an administration for Kismayu in the coming days," he told Reuters by telephone from Asmara.

The artillery and gun battles that broke out on Wednesday around the port were the heaviest in the area for months. Medical workers said at least 140 people had been wounded. Fearful residents said large, unidentified aircraft could be seen flying over the area since then.

"We don't know what will happen, but we are scared," said 35-year-old Hussein Ahmed.

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