(Updates with quotes from freed UNHCR boss)

By Daniel Wallis

NAIROBI, Aug 27 (Reuters) - Kidnappers freed the head of the U.N. refugee agency's office in Somalia on Wednesday but rising insecurity forced Medecins Sans Frontieres (MSF) to close a clinic in Mogadishu that provided essential health care to hundreds of women and children.

The capital of Somalia is one of the most dangerous places in the world for aid workers to operate. More than 8,000 civilians have been killed in the Horn of Africa nation in fighting since the start of last year.

In a rare piece of good news, gunmen released Hassan Mohammed Ali, a Somali who was in charge of the United Nations High Commissioner for Refugees (UNHCR) local office, on Wednesday after holding him captive for more than two months.

"This afternoon I joined my family and colleagues after being absent for a long time," Ali told Reuters by telephone.

"I was slightly injured in the kidnapping, but I recovered. No ransom was paid. I was released after they became convinced of my humanitarian work. They treated me well."

But MSF said the risks to its patients and staff were now unacceptable and it was closing a clinic.

"The closure comes following a further deterioration of the situation in the area where the clinic is located," MSF said in a statement issued in neighbouring Kenya.

"There has been a notable increase in violence, including mortars landing close to the clinic," it said.

In May and June of this year the centre had been treating an average of 300 out-patients and 35 in-patients each day. MSF continues to run two other clinics in Mogadishu, as well as several other projects in central and southern Somalia.

The violence pitting the country's interim government and its Ethiopian military allies against Islamist rebels has also uprooted 1 million people, triggering a humanitarian crisis that aid workers say is the worst in Africa.

A report this week said the number of Somalis needing aid had leapt 77 percent since January to more than 3.2 million, or more than a third of the population.

The study by the Food Security Analysis Unit, set up the United Nations, said the situation had been worsened by failed rains, rising food prices, inflation and the worst insecurity in the country since the early 1990s.

Aid agencies say the violence, including abductions and attacks on their staff, has made it harder and harder to reach the rapidly growing numbers in need of help.

"Until now, the world's response to the catastrophe has been massively inadequate," Robert Maletta, policy advisor for Oxfam International, said in a separate statement on Wednesday.

"All parties to the conflict have a responsibility to ensure that the millions of Somalis in need of emergency aid have access to it," he said. "Those parties that block access and assistance delivery must be held accountable." (Editing by Richard Balmforth)

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