By Irwin Arieff

UNITED NATIONS, Dec 22 (Reuters) - U.N. Secretary-General Kofi Annan and the 15-nation Security Council denounced on Friday a new round of fighting in chaotic Somalia and urged the interim government and Islamists to resume peace talks.

Four days of clashes between Somali Islamist forces and pro-government troops, mostly involving exchanges of artillery and rocket fire, have killed dozens and wounded hundreds, the International Committee for the Red Cross said, sparking fears of a wider war in the region.

Annan was "deeply concerned that the escalation of conflict in Somalia will have disastrous consequences for civilians, who are already suffering from the effects of years of instability and deprivation, compounded by the severe flooding that has recently affected parts of the country," his chief spokesman, Stephane Dujarric, said.

The U.N. leader wanted both the Western-backed transitional government, which controls just the south-central town of Baidoa, and the Somali Islamic Courts Council, which has encircled the town, to immediately return to negotiations without any preconditions, Dujarric said.

A separate statement, adopted unanimously by the 15-nation Security Council, said it remained the council's view that the transitional federal government offered the only route to peace and stability in Somalia, which has been without a strong central government since 1991.

The council statement urged both sides to draw back from conflict and refrain from any actions that could lead to greater violence, increase tension and mistrust, or further threaten civilians.

The current interim government was formed in Kenya in 2004, but has been unable to extend its influence beyond Baidoa.

The United States has accused the Islamists, which have been expanding their reach after seizing the Somali capital of Mogadishu in June, of harboring al Qaeda operatives.

The council on Dec. 6 endorsed an African peacekeeping force to help prop up the interim government but also urged the authorities to pursue peace talks with their Islamist rivals.

But the fighting broke out around Baidoa before any African peacekeepers could be sent in, raising fears the conflict might next suck in longtime foes Ethiopia, which backs the interim government, and Eritrea, which backs the Islamists.

Both countries are said to have troops in Somalia. Ethiopia has said it would make public any plan to go to war against the Islamists, who already view it as a fait accompli.

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