Heavy fighting broke out Tuesday in a densely packed slum area of the Somali capital, sending thousands of residents fleeing while a leading aid agency warned of a humanitarian catastrophe. Officials and residents said clashes erupted in Dharkinley in southwest Mogadishu around 10:00 A.M. (0700 GMT) when Somali loyalist forces attacked checkpoints manned by hardline militants. Terrified residents in the district, largely spared the fighting in recent years, packed whatever they could strap to their backs or load on carts and started flooding out of Dharkinley. Many headed southwards in the direction of Afgooye, where relief agency Oxfam warned that conditions were not fit for human habitation. “This morning heavy clashes erupted near Abagedo area, everybody is fleeing for their lives because they (the fighters) are using heavy machineguns and mortar shells,” one resident, Mohamed Ibrahim, said. Colonel Mohamed Hashi, a senior Somali police officer, said the fighting was heaviest in the morning. “Many people are fleeing the battle zones to avoid the crossfire,” Hashi added. In a report on Tuesday, Oxfam warned that the humanitarian crisis in the war-riven country was reaching catastrophic levels. “The recent fighting has made the humanitarian crisis in Somalia even worse,” said Oxfam's Hassan Noor. “Tens of thousands are on the move, hundreds of thousands are displaced and more than three million are in dire need of aid,” he added. Reports later said Somali government forces drove the nsurgents from two districts of the capital after heavy fighting and vowed to rid Mogadishu of the hardline rebels from next week. Sheik Hassan Dahir Aweys, a hardline Somali leader said Tuesday to be making progress in uniting two Islamist insurgent factions as a single front against the Western-backed government.