In the first two weeks of the Ethiopian imposition of the Transitional Federal Government (TFG) government, more than 1,500 people have been killed in fighting and, pro-rata the population, the country has seen the greatest displacement of people on the planet. Much of the fighting has involved an alliance of the Shabaab military wing of the former ruling Taliban-style, Islamic Courts and the dominant Hawiye clan against the Christian Ethiopian Army and small forces of the TFG. Now the fighting has spread to other centres outside of Mogadishu, where other clans and jihadists are active.

But much in the same way that the superior forces of US were initially victorious over Iraqi resistance, the Ethiopians, Africa's largest, most experienced and battle-hardened army, has apparently quelled large-scale fighting for the moment. How long this can hold is doubtful and depends how much and for how long the leaders of Hawiye clan are welcomed or convinced to participate in power sharing with the TFG.

What is certain, however, is that despite heavy losses, the Courts and jihadists' forces are still intact and have dispersed around the country. They appear to be receiving supplies from Ethiopia's archrival Eritrea and foreign fighters are reported to be landing in the hundreds by aircraft in the countryside. They promise to cause as much if not worse trouble to the Ethiopians and the TFG as the US and Iraq government has faced at the hands of its insurgency. Indeed, the al-Qaeda led and inspired Somali jihadists threaten to spread their war and influence into neighbouring Ethiopia, Djibouti, and Kenya. Al-Qaeda now has another opportunity to turn Somalia into a training ground and centre for their expansion throughout Africa.

There are a number of important factors undermining any hopes of peace. In the first instance the Ethiopians are looked on as loathsome occupiers. The TFG is seen as their proxy power, which, furthermore solely represents the interests of the Daoud clan and is bent on revenge against the Hawiye. Moreover, the TFG has so far acted against the interests of local interest groups, particularly the Hawiye and the warlords, as well as private enterprises which have their own armies. Existing administrators have been largely excluded and replaced by cronies of the TFG. Many of these warlords and privateers learned to profit from anarchy and could be said to have an interest in continuing it, though in recent days there are indications that some tentative deals have been struck.

For the mass of the population, the only period in which they really saw peace and stability was under the strict Shira law of the Islamic Courts during the six months from June 2006 to January 2007. Brief though this was, it can be looked by the people on as something of a "Golden Age" set against the last 16 years of madness. Weapons were removed from the streets, laws were applied and enterprises profited from the opening of trade with the re-establishment of the port and airport. Furthermore, the Courts, within which the Shabaab/al Qaeda group incubated, has largely retained its support network of private enterprises, mosques and schools, as well as its influence outside Mogadishu throughout much of Southern Somalia.

Their downfall was their declaration of jihad against the Christian-led regime in Ethiopia, but with suppliers and supporters throughout the region, in particular the government of Eritrea, they remain a formidable force, which, because of their multi-clan nature, can generate support from across wide swaths of the population. One thing is certain the Courts and al-Qaeda are no more going away than their Taliban/ al-Qaeda counterparts in Afghanistan are.

Moreover, more is to come and there is clear evidence of a "Baghdadisation" of an already anarchistic situation, as the Shabaab increasingly mimics al-Qaeda tactics used in Iraq and now more frequently in Afghanistan. The traditional forms of combat have been heavy and small arms fire with the speciality "technicals" – pick up trucks or Toyotas with machine guns and antiaircraft guns mounted on the back. In April, however, Mogadishu saw its first spate of suicide bombings and car/truck bombings against Ethiopian soldiers as well as injuring residents. Similar events have now begun in outlying towns and it can be expected to spread to Ethiopia and other neighbouring countries in the near future. When Sudan became a base for al-Qaeda in the '90s embassies and airliners were attacked in Kenya and Tanzania. There are already reports of a radicalisation of the Muslim population in Kenya and it is likely that al-Qaeda will find greater influence and recruits there and among the various Ethiopian groups supported by the Islamic Courts. Today, there is a long-standing guerrilla war taking place in north eastern Kenya, there has been a brief insurgency in Djibouti and Ethiopia is awash with Somali and other separatist movements and insurgent terrorist organisations.              

The Courts and Shabaab have a pan-Somali agenda, which calls for the unification of the Somali peoples dispersed in neighbouring countries and strong ties to separatist organisations like the Ogaden National Liberation Front (OLF), the smaller United Western Somalia Liberation Front (UWSLF) in Ethiopia, the Oromo Liberation Front (OLF), plus Coalition for Freedom and Democracy, the Ethiopian People's Patriotic Party and Sidama Liberation Front. The OLF, which is fighting for the liberation of Somali territory in Ethiopia was recently responsible for the terrorist attack on an Ethiopian oil field that killed 65 Ethiopians and nine Chinese and involved 200 fighters.

Almost half of the Ethiopia population is Muslim, although ruled by Christians. The Somalis make up 6% of the population, the Sidamo 9% and the Oromo a huge 40%. Djibouti is 94% Muslim and 60% of the population are Somali. Estimates of the Muslim population in Kenya vary, but it is more than 10%. Tanzania is 35% Muslim, Zanzibar 99% and they are a majority in Eritrea. Ethiopia controls two Somali provinces, Somaliland and Puntland. Consequently the potential for pan-Somali irredentism, independence movements and pan-Islamic insurgency are considerable in the region. In the long term they could even threaten the break-up of Ethiopia itself and many surrounding countries.