(Updates with UN report)

By Sahal Abdulle

MOGADISHU, April 20 (Reuters) - Shelling and gunfire rocked Mogadishu on Friday as an exodus from the Somali capital gathered pace from three days of battles that a rights group said had killed at least 113 people.

The United Nations said 321,000 people -- nearly a third of the city's population -- had fled since February in refugee scenes not seen in Somalia since the fall of a dictator in 1991.

Since Wednesday, battles pitting Ethiopian and Somali troops against Islamist insurgents have killed 113 people and wounded another 222, the Elman Peace and Human Rights Organisation said.

"Today was one of the worst days of shelling yet ... We call on both sides to cease the war immediately without any pre-condition," chairman Sudan Ali Ahmed told Reuters.

Parts of Mogadishu looked like a ghost town of empty streets and shattered buildings. In provinces round the city, tens of thousands of refugees waited under trees or beside roads in what aid groups say is a looming humanitarian disaster.

At packed Mogadishu hospitals, bloodied patients screamed and doctors struggled to tend to scores of wounded after four days of clashes between troops and insurgents.

Soldiers blocked off roads to military bases after a suicide attacker blew himself up on Thursday at a former prison now used by the interim Somali government's Ethiopian military allies.

Several dozen people, mainly civilians, died in that blast and other fighting across the city on Thursday including a rocket attack on a market-place.

Residents hardened by 16 years of lawlessness say violence is getting worse in Mogadishu, where militant Islamists and some disgruntled Hawiye clan fighters are battling Somali government forces and their Ethiopian military allies.

African Union peacekeepers have failed to stem the war.

U.N. Secretary-General Ban Ki-moon said in a new report to the Security Council that a "coalition of the willing" may be needed to enforce peace in Somalia, where U.S. peacekeepers came to grief in the 1990s.

Ban called on the 15-nation body to consider in June whether a conventional U.N. peacekeeping force could succeed in Somalia or something more was needed.

The report, made available on Friday, will be discussed by the Security Council next Tuesday.

"MARTYRDOM OPERATION"

President Abdullahi Yusuf tried to put a brave face on the situation. "I would say the problem of Somalia is slowly but surely ending," he said in Ethiopia where he was holding talks with his main ally, Prime Minister Meles Zenawi.

Mogadishu residents say the latest fighting is as bad as four days of battles that killed 1,000 people at the end of March. Hundreds of Somalis were fleeing by foot, donkey, cart and vehicle on Friday, Reuters witnesses said.

Yusuf vowed to hunt down gunmen loyal to an Islamist movement defying his government's bid to restore central rule for the first time since the fall of a dictator in 1991.

Ethiopia's state news agency said Yusuf and Meles, in talks, "underscored the need to intensify terrorist mopping up operations in Mogadishu".

Islamist leader Sheikh Sharif Ahmed said dozens of Ethiopian soldiers had defected in Mogadishu and fled across the sea to Yemen -- but Somali officials denied that.

Ethiopia dismissed on Friday comments by the U.N. humanitarian coordinator for Somalia that its troops and the Somali interim government were not helping with access for aid.

"(Eric) Laroche's statement shows a surprising lack of understanding of the situation in and around Mogadishu and the difficulties for relief operations caused by car bombs, land mines and random rocket attacks by extremists and terrorists," spokesman Solomon Abebe said.

Oxfam urged Kenya to reopen its border to allow aid to cross and Somali asylum seekers to be screened. (Additional reporting by Farah Roble in Mogadishu, Andrew Cawthorne and Guled Mohamed in Nairobi, Sami Aboudi in Dubai and Tsegaye Tadesse in Addis Ababa)

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