Addis Ababa - Somalia's President Abdullahi Yusuf and his prime minister signed a deal on Tuesday to work together after a weeks-long rift that threatened to wreck their interim government.

Yusuf fell out with Prime Minister Nur Hassan Hussein earlier this month after Hussein sacked Mogadishu's powerful mayor, who was a key ally of the president.

Both men have been locked in crisis talks for days with officials in neighbouring Ethiopia.

"We hope the agreement will end the differences between the Somali leaders," Ethiopia's Foreign Minister Seyoum Mesfin said after the pair signed the deal in Addis Ababa.

"Ten days ago, the very existence of TFG (transitional federal government) was at a critical point. The differences were a deciding factor that makes or breaks the transitional period, including the peace agreement in Djibouti."

Addis Ababa has propped up Yusuf's government since allied Ethiopian and Somalia troops stormed into Mogadishu over the New Year of 2007 and retook the capital from an Islamist movement.

The rebels have waged relentless Iraqi-style attacks against government positions since then in violence that has killed more than 8 000 and forced another one million from their homes.

Despite the rift between Yusuf and Hussein, the government did sign a tentative peace agreement with a faction of the rebel Islamists at UN-led talks in Djibouti last week.

But that pact has only served to stoke violence led by another faction of the opposition, whose fighters seized the strategic southern port of Kismayu on Friday.

Number of Somalis needing aid spikes to 3.2 million

By Daniel Wallis August 25, 2008

NAIROBI (Reuters) -

The number of people needing humanitarian aid in Somalia has leapt 77 percent this year to more than 3.2 million, more than a third of the country's population, an authoritative new study has shown.

The report by Food Security Analysis Unit, seen by Reuters on Monday, paints a bleak picture of a crisis compounded by failed rains, rising food prices, inflation, and the worst insecurity in the Horn of Africa nation since the early 1990s.

"Somalia is now facing the worst security situation in the last 17 years, with increased armed conflict and fighting, targeting of humanitarian aid workers, military build-up, increased sea piracy and political tension," the report said.

"This situation is severely undermining economic activities and humanitarian delivery, thus contributing to the overall deterioration in the humanitarian situation."

The FSAU was set up by the U.N.'s Food and Agriculture Organization to provide humanitarian agencies with reliable data from the lawless country of nine million people.

More than 8,000 civilians have died since the start of last year in fighting pitting Somalia's interim government and its Ethiopian military allies against Islamist insurgents.

The violence has driven about one million more from their homes, triggering what aid workers say is the worst humanitarian crisis in Africa.

"ONLY GETTING WORSE"

The FSAU called for an urgent scaling-up of aid programs to reach more of the needy in the most-badly affected areas.

"Food prices, both local and imported, are at record historic levels and are still climbing," the report said.

"More and more people, both rural and urban, are falling into Acute Food and Livelihood Crisis and Humanitarian Emergency as they cannot cope & poor and middle income households are becoming severely indebted."

The drought-stricken regions of Central, Hiran and Bakool have been particularly hard hit, the study found.

"This is confirmed by recent nutrition reports that indicate a doubling of the caseload of severely malnourished children in ACF feeding centers over the last three months in Dhusamareb, Galgadud," it said.

Most boreholes in Central region were being pushed beyond capacity due to lack of maintenance and generators, it added. High fuel prices had also contributed to water prices rising to between 300 to 1,000 percent above normal levels.

The U.N.'s World Food Program has warned that 3.5 million people may be in need of help by the end of this year. But an increasing wave of piracy off Somalia's coast this year has made bringing in its supplies more and more difficult.

"There are a few small pockets of improvement, but overall the situation is only getting worse for many Somalis who cannot afford food even if it is for sale while malnutrition is on the rise," WFP spokesman Peter Smerdon told Reuters.