By Mohamed Ali Bile

MOGADISHU, June 4 (Reuters) Rival Somali militia, whose fighting in Mogadishu has killed hundreds of people, repositioned and rearmed fighters today in readiness for a new attacks, witnesses said.

Residents fled their homes as militia prepared to attack Balad, a strategic town 30 km (19 miles) north of Mogadishu, which is controlled by a member of the anti-terrorism warlord coalition that has been battling forces loyal to Islamic courts.

''Balad town is empty, people have taken off,'' resident Hassan Muke told Reuters by telephone.

Elsewhere, officials said international and local aid workers based outside Mogadishu were leaving Somalia over fears the fighting would spread to other regions.

Islamic militia have in the last few days made steady gains, seizing villages near Balad but militia loyal to warlord Muse Sudi Yalahow who controls the town have vowed not to give up ground without a fight.

Islamic forces have taken over the villages of El Iffid, Ali Yaale, Garas Bintow and a military camp of Hiilweyne, 7 km (4 miles) outside Balad town, witnesses said.

Residents said National Security Minister Mohamed Qanyare and his heavily armed forces left their base in Daynile in Mogadishu on Saturday night.

They were believed to have moved towards Balad to offer support to Muse Sudi, who is also the commerce minister in Somalia's transitional government.

''There are fears that the war will start again because the militia are reorganising themselves,'' said one analyst.

Heavy machine-gun battles have broken out in recent days following a period of relative calm in clashes between Islamic warlords and secular bands widely believed to be supported by the United States.

Washington has not commented except to say that it welcomes support in its declared war on terrorism.

Residents say the latest fighting has involved some of the worst violence ever seen in Mogadishu.

Reuters SK RS1708