Somali government troops backed by Ethiopian tanks and MiG fighter jets have captured the last major stronghold of a militant Islamic movement, Somali Prime Minister Ali Mohamed Gedi said.
Islamic fighters, many of them Arab, were fleeing in heavily armed trucks toward the Kenyan border, 160km to the south after a 13-day onslaught that has been led by the Ethiopian army.
"I can confirm to you that our forces have captured Kismayo," Gedi said.
Somalia's interim government vowed to hunt down those who have fled.
The Islamic forces say they will launch an Iraq-style guerrilla war if defeated in open combat.
Among those sought were three al-Qaeda suspects wanted in the 1998 bombings of US embassies who the government said were being sheltered by the Islamic group.
The government said it hoped to catch them before they slipped out of the country.
Meanwhile, senior Western diplomats continued to push for the deployment of an African-led peacekeeping force in Somalia as soon as possible to help stabilize the country, said a US government official on condition of anonymity because the official was not authorized to speak to the media.
Government and Ethiopian forces were delaying their entry into the coastal seaport of Kismayo, which Islamic fighters captured in September, because of land mines.
"The Islamists have disappeared but our forces are still chasing them," said government spokesman Abdirahman Dinari.
He said the government had asked the US to provide air and sea surveillance to prevent suspected extremists from escaping.
Ethiopian troops were busy clearing the mines on the route into the city, Somalia's third largest.
Hundreds of gunmen who apparently had deserted from the Islamic movement began looting warehouses where the Council of Islamic Courts stored supplies, including weapons and ammunition.
Gangs skirmished in the streets of Kismayo and the city was descending into chaos, businessman Sheik Musa Salad said.
"Everything is out of control, everyone has a gun and gangs are looting everything now that the Islamists have left," he added.
The Islamic forces have a base near the Kenyan border on a small peninsula named Ras Kamboni, where there is a pier for traditional oceangoing boats known as dhows.
Ethiopian MiG fighter jets flew low over the ocean looking for boats that might be carrying the escaping Islamic fighters.
Kenyan President Mwai Kibaki, in his New Year's message, called for an urgent summit of the east African regional body IGAD to discus the Somali crisis.
The Islamic forces began to disintegrate after a night of artillery attacks along the front line and following a mutiny within their ranks, witnesses said.
On Sunday in Kismayo, an estimated 3,000 Islamic fighters were preparing for a bloody showdown, but Islamic fighter Rabi Ahmed said that about 50 militiamen in the city were refusing to go to the front and fight.
Islamic leaders had vowed to make a stand against Ethiopia, which has one of the largest armies in Africa.
Instead, they once again melted away in the face of advancing tanks and attacks by aircraft.
"Even if we are defeated we will start an insurgency," Sheik Ahmed Mohamed Islan, the head of the Islamic movement in the Kismayo region, said by telephone on Sunday.
"We will kill every Somali that supports the government and Ethiopians," he said.