ASMARA - Somali opposition figures formed a "liberation" movement on Wednesday threatening war on Ethiopian troops in their homeland in a move bound to polarise positions in the Horn of Africa even further.

The new group, agreed on in Eritrea by some 400 delegates ranging from Islamist leaders to former government officials, is called "The Alliance For The Liberation Of Somalia".

Last year thousands of Ethiopian soldiers crossed the border to help the interim government chase out an Islamist movement that had ruled Mogadishu and most of the south for six months.

Somalia has been beset by factional fighting and has been without stable government since 1991.

"We have two-track options: first is the liberation of Somalia through military struggle, the second is through diplomatic efforts," said movement spokesman Zakariya Mahamud Abdi.

Although its impact remains to be seen, the naming of the alliance alone will give a symbolic boost to Islamist-led insurgents fighting the interim Somali government and its Ethiopian military allies, analysts and diplomats said.

It will also provide yet another bone of contention between long-time foes Ethiopia and Eritrea, and is likely to make desperately needed reconciliation harder, they added.

"The opposition has been able to organise and has taken a very militant stand in favour of armed resistance," said Michael Weinstein, U.S. expert on Somalia at Purdue University.

The formation of the alliance would probably heighten the chances of fund-raising from sympathisers in the Somali diaspora and the Arab world, and annoy those backing the government and the African Union (AU) peacekeepers in Somalia, he said.

"This is not good news for the United States, the U.N., and Uganda, and Ethiopia," he said.


"NOW OR NEVER"

The Somali opposition conference delegates have expressed sympathy towards Islamist-led insurgents fighting Ethiopian and government troops since the start of 2007.

And spokesman Abdi sent a blunt message:

"I would warn the Ethiopian occupying forces to withdraw. It's now or never ... We have no military machines, but we have Somalis who are armed to the teeth," he said. Abdi added, however, that the group would dissolve once the Ethiopians left.

It was unclear what war strategy the alliance might pursue, and how it could link up with insurgents on the ground, but Abdi confirmed the new movement would include a military wing.

With 191 members of a central committee, the alliance includes well-known figures like Islamist leader Sheikh Sharif Ahmed -- considered a moderate in the Islamic Courts movement -- and former deputy prime minister Hussein Aideed.

Analysts said the only possible upside from the alliance would be to provide a unified movement to negotiate with, should the international community be able to broker talks.

Hardline cleric Sheikh Hassan Dahir Aweys, another senior leader of the courts movement on U.N. and U.S. lists of terrorism suspects, showed up at the Eritrea meeting after being in hiding for most of 2006. But it was not clear what position, if any, he would take in the alliance.

Analysts said the alliance was unlikely to make him one of their frontmen as that would alienate some potential support.

In an interview with Eritrean state media published on Wednesday, Aweys criticised Washington. "I am a Somali nationalist fighting for a free and united Somalia, and this is considered by the U.S. Administration as terrorism," he said.

Regional diplomats believe the United States gave tacit blessing for Ethiopia's entry into Somalia in 2006, although Prime Minister Meles Zenawi has denied that.