Ethiopian troops in armored vehicles rolled into Somalia Thursday and set up a camp near the home of the interim president, residents said, less than a day after Islamic militants reached the outskirts of the base of a U.N.-backed, but largely powerless government.

A spokesman for the Ethiopian government had said that his country would protect Somalia's transitional government from attack by the Somali Islamic militias who control much of southern Somalia. Numerous witnesses told The Associated Press that Ethiopian soldiers arrived Thursday afternoon in Baidoa, the only town held by the government, 150 miles northwest of Mogadishu and about 100 miles east of the Ethiopian border.

The Ethiopians smiled and waved to residents as they drove into Baidoa. They drove into a fenced compound near the transitional president's home in the town and Somali militiamen prevented residents from approaching the area, residents said.

One resident, speaking on anonymity because of fears of reprisals, said people were being kept off the roads leading to the building.

Dozens of Ethiopian troops, including those in armored vehicles, crossed into Somalia at the border town of Dolow on Thursday morning. Some drove on to Baidoa while others set up rear bases near settlements at the frontier, said Shukri Abdi-rahman, a Dolow resident.

Ethiopian's defense, foreign and information ministries spokesmen repeatedly denied Thursday that their troops had crossed into Somalia.

Ismail Hurreh, one of Somalia's several deputy prime ministers, dismissed reports that Ethiopian troops were deployed in Baidoa and refused further comment.

But late Wednesday, Ethiopia's Minister of Information Berhan Hailu told the AP that his government would intervene to prop up Somalia's transitional government, which has no effective military of its own and only controls the town of Baidoa.

"We have the responsibility to defend the border and the Somali government. We will crush them," Berhan said.

By moving troops into Mogadishu, Ethiopia could help create enough breathing space for peace talks planned Saturday to move forward. Or it could set the stage for a military confrontation between the better armed, better trained Ethiopians and the Islamic fighters.

Somalia invaded Ethiopia in 1978 in an attempt to grab land occupied by ethnic Somalis. Since then, Ethiopia has attempted to influence Somali politics to prevent another invasion. Ethiopia sent troops into Somalia in 1993 and 1996 to crush Islamic militants attempting to establish a religious government.

Somali President Abdullahi Yusuf Ahmed is allied with Ethiopia and has asked for its support. Hundreds of Ethiopian troops have been spotted along the countries' border in recent weeks — which the Islamic militia has repeatedly denounced.

Militia loyal to Supreme Islamic Courts Union reached within 20 miles of Baidoa on Wednesday, prompting the government to go on high alert in anticipation of an attack. The militia was expected to pull back on Thursday, court officials said.

The Supreme Islamic Courts Council militia seized Mogadishu and most of the rest of southern Somalia last month and has shown signs of planning to install strict religious rule, sparking fears it was a Taliban-style regime. The U.S. has accused the militia of links to Al Qaeda that include sheltering suspects in the 1998 bombings of U.S. embassies in Kenya and Tanzania.

Officials of the Islamic group had given conflicting accounts of their intentions after seizing the town of Bur Haqaba Wednesday and moving toward Baidoa, 70 kilometers (40 miles) away.

The head of the Supreme Islamic Courts Council's executive body, Sheik Shariff Sheik Ahmed, told local radio stations: "Our intention was not to attack Baidoa."

He said that the forces had only wanted to capture a nearby village because it was the home village of one of their officials.

The Islamic militiamen may simply have been testing Baidoa's military and diplomatic defenses. What happens next could depend on the success of talks scheduled Saturday and aimed at negotiating some kind of partnership between the government, which has access to international support and funding, and the Islamic groups, whose authority in Somalia is undeniable.

At the first round of the Arab League-mediated talks in Khartoum, Sudan, the government and the Islamic group agreed to stop all military action — though the Islamic group has been engaged in clashes and military deployments since. The government had at first balked at a second round, but agreed to resume talks under pressure from foreign governments that are pushing for a unified administration in Somalia.

"I appeal to both sides to respect the cease-fire and other provisions of the Khartoum agreement, including their commitment to refrain from any provocations that could lead to an escalation of the situation," said Francois Lonseny Fall, the U.N. special representative for Somalia. "The place to deal with differences is at the negotiating table."

The Islamic militia wrested Mogadishu from a secular alliance of warlords last month, bringing weeks of relative calm to a capital that has seen little more than chaos since warlords toppled the last effective central government in 1991 then turned on one another.

The transitional government includes some of the warlords accused of destroying Somalia, and it has been weakened by internal rivalries. Its weakness created a vacuum into which the Islamic forces stepped.

But the militia has shown an increasingly radical streak, cracking down on purportedly non-Islamic activities, such as a World Cup screening, a wedding with live music and people watching video films. It also replaced its moderate main leader with Sheik Hassan Dahir Aweys, whom the U.S. has linked to Al Qaeda. Aweys denies the allegation.

The Islamic militia controls most of this Horn of Africa nation. One exception is the breakaway republic of Somaliland, which set up its own administration after Somalia descended into anarchy.