A U.N.-led peace initiative for Somalia appears to have failed, with government and opposition delegations refusing to meet face-to-face in Djibouti to try to end 18 years of conflict.

"I made the decision to terminate the conference," U.N. envoy for Somalia, Ahmedou Ould-Abdallah, told a news conference in Djibouti late on Sunday.

In the most recent failed international diplomatic initiative, Ould-Abdallah persuaded teams from both sides to come twice to neighbouring Djibouti in May and this month.

But they declined to meet directly, the sticking point said to be the presence of Ethiopian troops in Somalia helping the government fight Islamist-led insurgents.

Both the government and opposition delegations were in Djibouti on Monday, however, and sought to put a softer spin on events than the U.N. envoy.

"There was no face-to-face meeting between us and the government," said Dahir Mohamud Gelle, spokesman for the opposition Alliance for the Re-Liberation of Somalia (ARS).

"We have not yet decided to pull out of the talks but we feel that the talks cannot go on if the government insists on its agenda of keeping the Ethiopians in our country."

A Somali government spokesman, Abdi Haji Gobdon, also said he hoped the peace initiative had not broken down irretrievably.

"We have high hopes that talks can succeed," he said in Mogadishu, adding, however, that Ethiopian troops could only leave once a U.N. peacekeeping mission came to Somalia.

A contingent of 2,200 African peacekeepers has made little headway stemming the conflict, and the United Nations is reluctant to intervene until security improves.

Fighting between Islamist insurgents and Somali-Ethiopian troops killed at least 28 people over the weekend in Mogadishu.

The rebels are waging an Iraq-style insurgency of roadside bombings, ambushes and assassinations.

The violence has triggered a humanitarian crisis that aid workers say may be the worst in Africa, with at least a million refugees in a nation experiencing constant civil conflict since the 1991 toppling of a military dictator by warlords.

Ould-Abdallah said both sides had, separately, agreed on some topics like humanitarian assistance, but with leaders still far apart, "it is impossible to prolong negotiations indefinitely because of budgetary constraints".

Some hardline opposition leaders of the Eritrea-based ARS had boycotted the Djibouti talks, while insurgent leaders inside Somalia had also denounced them.