By Aweys Yusuf

MOGADISHU, Nov 9 (Reuters) - Corpses were scattered on Mogadishu streets on Friday after overnight fighting between Somali insurgents and Ethiopian troops that killed 12 people.

The bodies of the dead, who included two women, could be seen in the city's northern Sqa Holaha neighbourhood, where insurgents dragged dead Ethiopians through the streets on Thursday.

"Some of the dead bodies were identified by their relatives. Some are still lying here. The villagers are busy collecting their dead loved ones," said resident Mohammed Abdullahi.

Ethiopian troops fired tank shells into residential areas where insurgents were operating during fierce combat on Thursday that continued overnight, the latest clashes in intensified fighting over recent weeks.

Secretary General Ban Ki-moon on Thursday ruled out sending U.N. peacekeepers to Somalia, saying it was neither realistic nor viable. Lack of security had prevented sending even a technical assessment team, he said.

Fighting has persisted throughout this year, ever since the interim government, backed by Ethiopia's powerful army, drove out militant Islamists who had controlled much of southern and central Somalia.

The latest fighting has increased an exodus from the anarchic city, where hundreds of thousands have fled to escape the near daily battles.

"The situation is very tense. We are fleeing ... we cannot live here any more," said Ali.

Government officials refused to comment on the situation.

(Writing by Wangui Kanina; Editing by Barry Moody)

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