At least 130 people in Somalia's capital, mostly civilian bystanders, and wounded 280 others have been killed by bloody battles between transitional government forces and Islamic fighters, according to hospital officials.

The Sii-Sii neighborhood, a residential area of northern Mogadishu, was pounded by heavy artillery and mortar fire Friday as violence clashes continued for a sixth day.

The fighting spread later in the day to the neighboring district of Yaqshid, Reuters reported.

The transitional government forces are made of aligned warlords, while the Muslim fighters are a coalition of radical Islamic leaders, known as the Islamic Court Union.

Last Thursday, Islamic troops battled with the government forces for control of a strategic road in Mogadishu, The Associated Press reported.

Thousands of families have begun to flee the capital, AP said.

Many residents described the fighting as the worst they have seen in more than a decade of lawlessness, the news agency reported.

"This is the first time we have witnessed people fighting in Somalia and targeting civilians in such a savage way," said Jama Mohamud told AP, while sitting with his injured wife in a local hospital.

Jama said all three of his children were killed when the family's house was struck by mortar shells.

Journalist Mohaned Amin told CNN the "killing is happening everywhere."

"People are very scared," he said.

The warlord alliance accuses the Islamic leaders of having ties to al Qaeda, the union says the warlords are puppets of the United States.