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By Guled Mohamed

MOGADISHU, July 10 (Reuters) - Several explosions ripped through Mogadishu's sprawling Bakara Market on Tuesday, killing at least two people in a fifth day of violence in the area.

Somalia's interim government says Bakara, one of the world's biggest open air arms markets, is a stronghold of Islamist insurgents it blames for almost daily guerrilla attacks on its forces and their Ethiopian military allies.

Since Friday, assailants have thrown grenades at soldiers patrolling Bakara's narrow alleys and civilians have been killed as the troops returned fire. In the first attack on Tuesday, witnesses said a landmine was detonated outside a bank.

"One dead man has been found near the explosion. Another man is lying dead behind my shop. I am locked inside my shop," one businessman who asked not to be named told Reuters by telephone.

Residents said troops at the scene opened fire in response.

At least one blast later was caused by explosives hidden in a motorbike, and another grenade was thrown at soldiers. It was not clear if there were more casualties.

Tensions have been rising in the vast market, where merchants accuse government troops -- some of whom have not been paid in months -- of taking their goods by force.

Local media said 40 men praying at a mosque in southern Mogadishu were arrested late on Monday in a sweep by security forces, but that could not immediately be confirmed.

Somalia's interim government is struggling to stamp its authority on Mogadishu in the 14th attempt to restore order to the anarchic country since the ouster of a dictator in 1991.

It says Bakara is a key hideout of insurgents including remnants of a hardline Islamist movement that ruled the capital and much of southern Somalia for six months last year.

The rebels have been blamed for a wave of bombings and assassination attempts since the movement was chased out of Mogadishu by government forces and Ethiopia's army in January.

The government and Western diplomats are pinning hopes for peace on a major clan reconciliation conference that has been postponed twice due to insecurity, but is scheduled to take place in the coastal city on Sunday.

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