African Union calls for Eritrea sanctions

* AU says Eritrea backing rebels in Somalia

* Calls for sanctions, no-fly zone, sea blockade

* Eritrea denies accusations



By Barry Malone

ADDIS ABABA, May 23 (Reuters) - The African Union called on the United Nations late on Friday to impose immediate sanctions on Eritrea for supporting Islamist insurgents attempting to overthrow Somalia's government.

But Eritrean Ambassador Araya Desta said in a letter to the U.N. Security Council: "I wish to put on record my government's strong opposition to, and categorical rejection of, the unsubstantiated accusations levelled against my country."

Fighting in Somalia's capital Mogadishu on Friday killed at least 45 people, the highest daily death toll in more than two weeks of intense battles, after government forces launched a dawn offensive on the Islamist militants. [ID:nLM978588]

"(The U.N. Security Council should) impose sanctions against all those foreign actors, both within and outside the region, especially Eritrea, providing support to the armed groups," the 53-member African Union (AU) said in a statement.

The statement echoed demands made on Thursday by the east African regional bloc, the Inter Governmental Authority on Development (IGAD). IGAD is made up of Djibouti, Ethiopia, Kenya, Somalia, Sudan and Uganda.

Eritrea suspended its membership of IGAD in 2007.

President Sheikh Sharif Ahmed's U.N.-backed administration is the 15th attempt in 18 years to set up central rule in Somalia. Neighbouring states and Western security forces fear the nation could become a haven for al Qaeda-linked militants unless the hardline Islamists are defeated.

Somalia's transitional government has said the insurgents had been joined by foreign fighters and were receiving arms from Eritrea.

The AU reiterated IGAD's request that the United Nations enforce a no-fly zone on Somalia and block its sea ports to prevent foreign fighters and arms from entering.

"(We want) the imposition of a no-fly zone and blockade of sea ports to prevent the entry of foreign elements into Somalia, as well as flights and shipments carrying weapons and ammunitions to armed groups inside Somalia," the statement said.

In an interview with Reuters on Friday, influential insurgent leader Sheikh Hassan Dahir Aweys said Eritrea supported the rebel struggle. He said a few Arab fighters had joined the rebels in the name of Islam. [ID:nLM978588]

Aweys returned to Somalia in April from exile in Eritrea. (Editing by David Clarke)