Somali and Ethiopian troops drove Islamic fighters out of the last major town before Mogadishu on Wednesday, and the government predicted the capital and stronghold of the radical Islamists would fall without a fight.

Government spokesman Abdirahman Dinari said no assault was planned on Mogadishu because the forces of the Council of Islamic Courts were crumbling so fast.

"Islamic courts militias are already on the run and we hope that Mogadishu will fall to our hands without firing a shot," he said.

The Islamic Courts movement had grown steadily in power for six months, until the dramatic entry into the war by Ethiopian troops last week. Since then, fortunes have changed dramatically with the Islamists in full retreat.

On Wednesday, thousands of Ethiopian and Somali government troops were seen in tanks heading toward Balad, only about 18 miles away from Mogadishu, said Nadifo Ali Tifow, a resident in Qalimow village, along the same road.

Former warlord Mohammed Dheere, who controlled the town of Jowhar before it was captured by the Council of Islamic Courts in June, led the Somali government troops back in, said resident Abshir Ali Gabre.

"We will attack Mogadishu tomorrow from two directions," Dheere told the crowd, before the government denied that would happen.

Fighting could be heard at a military camp south of Jowhar and in the village of Lego. An Islamic official said his troops were simply entering a new phase in their battle.

"Our snakes of defense were let loose, now they are ready to bite the enemy everywhere in Somalia," said Sheik Mohamoud Ibrahim Suley. He did not elaborate, but some Islamic leaders have threatened a guerrilla war including suicide bombings in Addis Ababa, Ethiopia's capital.

Hundreds of people had fled Jowhar, anticipating major fighting, but others seemed resigned to it after suffering from drought and flooding over the last two years.

"We do not know where to escape, we are already suffering from floods, hunger and disease," Abdale Haji Ali said from Jowhar. "We are awaiting death."

In Geneva, the U.N. refugee agency said it was preparing for the possible arrival of thousands of Somalis fleeing the fighting in neighboring Kenya and Ethiopia. Staff, trucks and emergency relief items for up to 50,000 people are being readied, UNHCR said.

Ethiopia sent fighter jets streaking deep into militia-held areas Sunday to help Somalia's U.N.-recognized government push back the Islamic militias. Ethiopia bombed the country's two main airports and helped government forces capture several villages.

Ethiopian Prime Minister Meles Zenawi said Tuesday that Ethiopian forces may soon wrap up their offensive against the Islamic militias that until recent days controlled most of the southern part of the country.

Zenawi said he aims to severely damage the courts' military capabilities and allow both sides to return to peace talks on an even footing. He has said he would not send his troops into Mogadishu, which the Islamic movement has held since June.

A State Department spokesman in Washington signaled support Tuesday for Ethiopian military operations against Somalia, noting that Ethiopia has had "genuine security concerns" stemming from the rise of Islamist forces in its eastern neighbor.

Meanwhile, the chairman of the African Union Commission has called a meeting Wednesday in Addis Ababa, Ethiopia, of the 53-nation AU, the Arab League, and the Intergovernmental Authority on Development, a seven-nation East African group, to try to end the fighting and resume dialogue between Somalia's warring parties.

The U.N. Security Council on Tuesday took no immediate action on a draft presidential statement circulated by Qatar calling for a cease-fire and withdrawal of foreign forces, specifying Ethiopian troops.

The United States and several other nations objected to singling out Ethiopia and the call for a truce, saying talks and a political agreement are needed for stability before foreign forces can leave. The council agreed to continue discussions Wednesday.

Somalia has not had an effective government since warlords overthrew longtime dictator Mohamed Siad Barre in 1991, pushing the country into anarchy.

Two years ago, the United Nations helped set up a central government for the arid, impoverished Horn of Africa nation. But until the past week, it had little influence outside of its seat in the city of Baidoa, about 140 northwest of Mogadishu.

The country was largely under the control of warlords until this past summer, when the Islamic militia movement pushed them aside.

One critical issue is whether the central government can win the support of Somalis. Many resent Ethiopia's intervention because the countries have fought two wars over their disputed border in the past 45 years.

Experts fear the conflict in Somalia could engulf the region. Islamic courts leaders have repeatedly said they want to incorporate ethnic Somalis living in eastern Ethiopia, northeastern Kenya and Djibouti into a Greater Somalia.

Any effort by the Somali government or Ethiopia to take the capital risks a disaster similar to the U.S. intervention in Somalia in 1992.

That U.N.-sponsored mission ended in 1993, after Somali militiamen shot down a U.S. Army Black Hawk helicopter. Eighteen American servicemen were killed in the crash and vicious street fighting that preceded and followed, made famous in the book and movie "Black Hawk Down."