MOGADISHU, Somalia - Islamist group al-Shabaab announced on Saturday that it had retreated from the key Somali port city of Kismayo, following a coordinated assault by Kenyan and African Union (AU) forces to capture the city for the government.
"Last night after more than 5 years the Islamic administration in Kismayo closed its offices," the rebel group said on its Twitter feed. The group said it planned a counter attack to retake the city and turn the region into a "battle-zone."
The AU says it is present in northern areas of Kismayo. While residents report al-Shabaab fighters have left other districts too, the Western-backed coalition of African troops are not yet fully in control of the city, the last major urban area run by the Islamists.
The full attack by the foreign troops on the city, which served as an al-Shabaab administrative and economic centre, began early on Friday, following airstrikes against the group's bases in the preceding days.
By Saturday morning, there were incidents of residents looting al-Shabaab's administrative offices, according to witnesses, though violence during the day was limited. Overnight gun battles were reported.
The UN said thousands of people fled the city in the days leading up the AU's efforts to take the area, fearing heavy battles.
Aid group Medecins Sans Frontieres said its clinics saw a significant drop in the number of patients, as families took their ill relatives and escaped to safer regions.
But analysts say that if al-Shabaab ends up losing all its influence over the ports in Kismayo, the group could take a major economic hit.
The Islamists use the port to export natural resources and other goods, a way of earning hard currency, despite UN sanctions on Somalia outlawing such exchanges.
"This is a game-changer for the people of Somalia, it is a defining moment," Kenyan President Mwai Kibaki said.
Al-Shabaab has been waging an insurgency against the government since 2007, but in the past year has been on the back foot, ceding ground to AU troops, who are securing key regions for the government.
The country has not been under the control of a central authority since 1991, when civil war spread throughout the strategically located Horn of Africa nation.
This month, for the first time in decades, parliament elected a president on Somali soil, as part of a UN-backed plan for a transition to stability in the country.