MOGADISHU, Oct 5 (Reuters) - Islamist insurgents have demanded to be given some of the weapons aboard a hijacked Ukrainian ship carrying 33 tanks but the pirates holding it have refused, a local official said on Sunday.

The Islamist gunmen from the al Shabaab group opposing Somalia's weak interim government have also received a five percent cut of the $1.5 million paid out for a Spanish ship released several months ago, a resident told Reuters.

About two weeks ago, heavily-armed pirates captured the MV Faina near Hobyo town in central Somalia and are demanding a $20 million ransom. Several U.S. navy ships are watching it to ensure none of the weapons are unloaded.

"Al Shabaab wanted some weapons from the Ukrainian ship but the pirates rejected their demands," a local official who asked not to be named told Reuters. "Al Shabaab went away after they were rejected by the residents and the pirates. I am sure the group is not far from the area," he said.

Somalia pirates have seized more that 30 vessels off the coast of their anarchic country so far this year and received amounts between $18-30 million in ransoms, according to a report by British think-tank Chatham House released earlier this week.

Residents confirmed fears that ransom payments to pirates were being passed onto the Islamist movement and were fuelling the insurgency against President Abdullahi Yusuf's government.

One resident and a relative of the pirates holding the Ukrainian vessel said the al Shaabab men received a five percent share of the last ransom paid but had been demanding more.

"Al Shabaab demanded more money from pirates and they disagreed," resident Hussein Ali told Reuters. "They met the pirates near Hobyo and asked for more money...but the pirates refused."

They are also expecting a share of any money paid out for the Ukrainian ship and two Greek ships held at Hobyo, he said.

"They are waiting for some money from these three ships held in our area. Most of the al Shabaab who asked for money are in the same sub-subclan with the pirates around Hobyo," Ali said.

The United States has linked al Shabaab as a terrorist organisation to Osama bin Laden's al Qaeda.

The waters between Somalia and Yemen are a major artery used by nearly 20,000 vessels a year heading to and from the Suez Canal.

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