African Union and Somali government troops were within striking distance Wednesday of the key rebel stronghold of Afgoye, site of the world's largest displaced people's camp, officials said.

Civilians fled as long columns of Somali and AU troops backed by tanks advanced for a second day, moving from the capital Mogadishu towards Afgoye, a strategic town and a key base of the Al-Qaeda-linked Shebab fighters.

"It is truly a great gain... the operation was very successful and we are now very close to Afgoye," Somalia's Defence Minister Hussein Arab Isse told AFP.

"The plan for the next 48 hours is not to only capture Afgoye but to go further," he added, speaking in the Ethiopian capital.

AU and Somali troops have pushed at least 13 kilometres (eight miles) northwest from the capital, about halfway to Afgoye town, moving slowly down the road known as the Afgoye corridor, where hundreds of thousands live in basic shelters.

The Shebab are "on the run" said Lieutenant General Andrew Gutti, commander of the 11,000-strong African Union Mission in Somalia (AMISOM), claiming that the long-awaited "operation continues to make strong progress."

However, the extremist Shebab claimed to have repulsed the attack and boasted of killing several soldiers, including Western military advisors.

Witnesses reported several casualties, but the claims could not be independently verified. The Shebab also claimed to be sending reinforcements to the front line, but others suggested the insurgents were instead pulling back.

Heavy shooting and mortar fire was reported Wednesday, killing at least four civilians on the outskirts of Deynile, a suburb of Mogadishu on the road to Afgoye.

"We were preparing to leave the area because of the fighting when a mortar shell hit a house and killed four people," said Ali Yusuf, a resident.

More than 400,000 people, around one third of all the displaced people in Somalia, were living in the Afgoye corridor at the start of the year, fleeing war or drought, according to the UN, which warned that civilians must be protected.

Impoverished plastic shelters and rag and cloth huts are scattered across the arid plains where the troops are advancing.

Long lines of trucks and buses piled high with people and their belongings lined the road towards Mogadishu, defying AU calls for civilians to remain in their homes.

Mark Bowden, the UN humanitarian coordinator for Somalia, urged all sides to "minimise the impact of conflict on civilians and allow full humanitarian access to all people."

"A prolonged operation could lead to displacement, further straining the capacity of settlements and host communities in Mogadishu, or driving people away from the life-saving help they require," Bowden said in a statement.

In recent months thousands of civilians have left the Afgoye area for the capital, ahead of the expected assault on the bases to which many Shebab retreated after pulling out of fixed positions in Mogadishu last year.

"Many people are fleeing from the Afgoye corridor towards Mogadishu," said Abdi Hashi, a resident of Deynile.

"Both sides are now reinforcing their positions, and the movement of vehicles on the main Afgoye road is very limited," he added.

However, the hardline Shebab dismissed claims they had abandoned their positions on the outskirts of Deynile.

"The mujahedeen fighters fought back fiercely... the fighters blocked their ambition for advancement," Shebab spokesman Sheikh Abdulaziz Abu Musab told reporters.

"Among the casualties were Western military commanders whose injured and dead bodies were picked by helicopters from the battle zone," he added. The claims could not be confirmed.

AU and Somali troops have made significant gains in recent months against Shebab militants, although the Islamists have switched to guerrilla tactics in Mogadishu, including a series of suicide and grenade attacks.

Somalia's weak and Western-backed transitional administration has until August to set up a permanent government, but the international community has expressed concern it is failing to meet key deadlines.

The mandate of the transitional government has already been extended several times, and Western nations say it cannot be extended again.