More people have been displaced in Somalia in the past two months than anywhere else in the world
Stephanie Bunker, spokeswoman for UN relief coordinator John Holmes, said at least 350,000 people had fled fighting in Mogadishu since February.
There is also concern for those trapped in the city, where more than 600 have died from acute diarrhoea and cholera.
A BBC correspondent says gunfire has stopped for the first time in 10 days.
AFP news agency is reporting that Ethiopians and government troops are moving house-to-house in northern districts arresting suspected insurgents.
However, the city's Coca-Cola factory, opened in 2004, was looted overnight by gunmen in 12 trucks.
"Our offices were broken into and all computers looted. We had supplies of sugar that were supposed to last the whole year - they were also looted," manager Bashir Mohamed Araye told Reuters news agency.
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