Hundreds of residents and rebel fighters fled Hudur, 420 kilometers (260 miles) southwest of Mogadishu, as troops moved into town. A resident said the fighting was over but sporadic gunfire could be heard.
Hudur is the administrative headquarters of Bakool region. The town has served as a training base for the militant group al-Shabab.
The fall of Hudur is a big blow to the al-Qaida-linked group’s control of southern Somalia.
Al-Shabab confirmed the withdrawal, saying its forces made a tactical retreat.
“Our mujahedeen forces have made a tactical retreat from Hudur as part of the plan to disable the enemy in guerrilla warfare,” the group said in a statement on their website Thursday.
Al-Shabab has increased its use of suicide and roadside bomb attacks since it was forced out of Mogadishu last year by African Union troops. Troops from Ethiopia are attacking al-Shabab from the west, while Kenyan forces are attacking from the south. Al-Shabab still controls wide tracts of southern and central Somalia, but faces mounting pressure.
Somalia has been mired in conflict since 1991, when long-term dictator Siad Barre was overthrown by warlords who then turned on each other.
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