Nairobi  - The moderate Islamist and opposition leader Sheikh Sharif Sheikh Ahmed was elected Somalia's president early Saturday in a parliamentary vote held in neighbouring Djibouti.

Of the 420 votes cast, 293 went to Sharif, the Somali news agency Shabelle reported.

The vote took place in the same week that legislators decided to nearly double the size of parliament to include Sharif's opposition Alliance for the Re-Liberation of Somalia (ARS) and at a time when their nation is under siege from Islamist insurgents.

Maslah Mohamed Siad, the son of former dictator Mohamed Siad Barre, received 126 votes, Shabelle said.

Observers said they believe Sharif was the best candidate to unify the divided parties in the Horn of Africa country that has been plagued by chaos since Barre's 1991 ouster. Somalia's instability caused Saturday's vote to be held in Djibouti.

Sharif, the head of the ARS' moderate branch, is also the leader of the Islamic Courts' Union (ICU), which controlled the capital, Mogadishu, for six months in 2006 and briefly brought some order to the war-torn nation.

The election comes after President Abdullahi Yusuf Ahmed resigned in December when parliament thwarted his attempt to sack Prime Minister Nur Hassan Hussein, who also contested the presidential race. He, along with Sharif, had been considered a favourite, but he withdrew after the first round of voting.

Parliament was enlarged to 550 MPs Monday to accommodate 200 members of the ARS as part of a UN-backed peace process to create a unity government and end Somalia's instability.

However, the new government and president face a major challenge in governing Somalia.

The main insurgent group, al-Shabaab, a militant offshoot of the ICU, controls much of Somalia, including the seat of parliament in Baidoa.

Al-Shabaab, which has been waging a bloody insurgency since early 2007, seized Baidoa Monday, hours after Ethiopian troops who had been propping up the central government for two years left the country.

The group has vowed to continue fighting to ensure that strict Islamic law is imposed in all of Somalia.

With the departure of Ethiopia, only an undermanned African Union force of around 3,000 troops from Uganda and Burundi remained to back government forces although the two countries have put two extra battalions on standby.

The union is trying to scrape up more troops, but the United Nations has ruled out sending in a peacekeeping force.

However, al-Shabaab faces opposition from the government-aligned Islamist group Ahlu Sunnah Waljamaca, which recently seized control of two towns from al-Shabaab.

Ethiopian forces invaded in late 2006 to help kick out the ICU.

The invasion sparked a bloody insurgency that has killed an estimated 16,000 civilians and displaced around 1 million.

The conflict, combined with drought and rising food prices, has created a humanitarian catastrophe. About 3.25 million people in Somalia, almost half the population, are dependent on food aid. (dpa)