They said a US Navy destroyer fired on several targets overnight where Islamist militants are believed to have bases in mountainous and remote areas outside the coastal town of Bargal.

"The US military was targeting the al-Qaeda hideout. This was aimed at flushing out all the terrorists," said Mussa Jelle Yusuf, the governor for Barri region.

"Puntland troops are surrounding the Bargal hills and hunting for those al-Qaeda elements. They ... will be captured or killed," he added.

Witnesses earlier confirmed the bombardment, but could not say if there had been any casualties.

"We cannot yet tell you the casualty figures, but what I can confirm is that the American warship shelled several targets in the surroundings of Bargal" late Friday, Mohamoud Salah, a resident in the area told AFP by satellite phone.

"The heavy shelling continued about three hours around the coastal area and the mountainous sites where the Islamists had their trenches," he said.

The CNN television channel reported that the destroyer was targeting a suspected al-Qaeda operative believed to have been involved in the 1998 attacks on US embassies in Kenya and Tanzania that killed 224 people, mostly Africans.

A Puntland military official said the attack came three days after authorities there reported the entry of Islamist fighters and foreigners of Arab origin into Bargal, a coastal town about 1,250km northeast of the Somali capital Mogadishu.

"Our forces have fought with Islamic fighters, including foreigners linked to al-Qaeda," said the official, who requested anonymity.

"After the fighting a US Navy ship shelled three targets on the outskirts of Bargal in the mountainous area," he said.

"We cannot get information on casualties, but the shelling continued for hours.... The Puntland troops are still chasing Islamic fighters in the mountainous area," he added.

On Wednesday, Puntland said its troops had killed at least two foreign fighters who had sailed into Bargal in two boats accompanied by heavily-armed Somali gunmen.

"These are al-Qaeda fugitives who fled from the southern part of Somalia. We do not know the motive of their arrival here, but it is definitely terrorism-related," Yusuf said.

Witnesses said the attacked areas were remote and difficult for Puntland ground troops to access.

A US force called the Combined Joint Task Force/Horn of Africa is permanently based in Djibouti and patrols the Indian Ocean and the Gulf of Aden with the aim of reducing the threat of terrorism.

Earlier this year, a US aerial gunship bombed positions in southern Somalia after Ethiopia-backed Somali government forces ousted a powerful Islamist movement from the country's southern and central regions. Local elders said more than 100 civilians were killed.

The targets were suspected al-Qaeda operatives blamed both for the 1998 US embassy bombings and the 2002 suicide attack on an Israeli-owned hotel in the Kenyan port of Mombasa that killed 15 people.

Among the so-called "high value" al-Qaeda militants believed to be in Somalia are Fazul Abdullah Mohammed from the Comoros, Kenyan Saleh Ali Saleh Nabhan and Sudanese national Abu Taha al-Sudani.

Others are Sheikh Dahir Aweys, the hardline cleric heading Somalia's Islamic Courts Union and Adan Hashi Ayro, the commander of the Islamists' militia wing, the Shabaab.

US intelligence says that the movement loyal to Osama bin Laden has stepped up operations in Somalia, a nation of about 10 million people wracked by lawlessness since the 1991 ouster of dictator Mohamed Siad Barre.

Northern Somalia's Puntland and neighbouring Somaliland broke away from Somalia proper and declared a form of autonomy.

Puntland president Adde Mussa said al-Qaeda planned attacks in northern Somalia, which has been spared the recent heavy fighting between Somali government forces and Islamist and clan insurgents.