Islamic militiamen holding most of southern Somalia deployed hundreds of fighters outside the base of the U.N.-backed interim government Wednesday and said they planned to seize it.
Neighboring Ethiopia said it was prepared to invade to defend the Somalian government.
Seizing the town of Baidoa would make the Islamic militia the uncontested authority in most of the country.
The interim government was on high alert and ready to defend itself, Deputy Information Minister Salad Ali Jelle said. But the administration is almost powerless and barely able to control Baidoa, 140 miles northwest of the capital, Mogadishu.
The militiamen seized Mogadishu last month. They have installed increasingly strict religious rule, sparking fears of a Taliban-style hard-line regime. The United States has accused the militia of sheltering suspects in the 1998 bombings of U.S. embassies in Kenya and Tanzania.
"Nothing will stop us from going into Baidoa," said Sheik Muktar Robow, the militia's deputy defense chief. He said more than 130 fighters who had backed Somalian transitional President Abdullahi Yusuf had defected to the Islamists' side.
Yusuf is allied with Ethiopia, and has asked for its support. Hundreds of Ethiopian troops have been spotted along the countries' border.
"We have the responsibility to defend the border and the Somalian government," Ethiopian Information Minister Berhan Hailu said.
The Somalian Islamists are allied with Muslim separatists in the Oromo region of Ethiopia.
Somalia has had no real government since the overthrow of Maj. Gen. Mohamed Siad Barre in 1991.