(Releads with final communique)

By Azziz El-Kaissouni

CAIRO, April 3 (Reuters) - The United States and European and African countries called for a ceasefire in Somalia on Tuesday and took a strong line in favour of the transitional government which took power last year with Ethiopian help.

In a joint statement after a one-day meeting in Cairo, the International Contact Group on Somalia said: "The Contact Group calls on all parties to cease immediately all hostilities."

It added: "The Contact Group strongly condemns actions of extremists and terrorists who continue to threaten the Transitional Federal Institutions (government)."

"(It) supports efforts to counter these threats, while ensuring that action is proportionate, avoids civilian casualties and prevents the disruption of humanitarian efforts."

A truce held for a second day on Tuesday after Somali government troops backed by Ethiopian soldiers fought Mogadishu's dominant clan, the Hawiye, and insurgents loyal to Islamist courts ousted from power in the New Year.

Hundreds of people were killed in the fighting and at least 100,000 fled the coastal city.

The contact group -- which includes Britain, Italy, Kenya, Norway, Sweden, Tanzania, the United States, the European Union, the United Nations, the African Union and the Arab League -- said "all relevant groups" should be represented at a proposed reconciliation meeting to end the conflict.

But it did not address whether the clan militias and allies of the Islamic Courts would have a role in the process.

Arab League Secretary-General Amr Moussa told the session the only groups excluded from the meeting should be "those who adopt violence and extremism as a way of life or a method".

U.S. Assistant Secretary of State Jendayi Frazer, told reporters the aim "certainly isn't to exclude any individuals who are associated with the Islamic Courts."

"Groups will be represented as members of clans, subclans and subsubclans, as ... religious authorities, as civil society, business, women's groups, so there are many ways in which individuals who are Islamists or are militia could be part of this process," she added.

The statement called the conflict inter-clan fighting but blamed it mainly on what it called extremists and terrorists.

The Contact Group, which has little presence on the ground in Somalia, backs the proposal to deploy some 8,000 African Union troops in Somalia so that Ethiopian troops can leave.

It condemned the killing of a Ugandan soldier this week and the earlier killing of a crew of a Belarusian plane which was providing logistical help for the African Union mission.

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