Nairobi: The African Union says 10 soldiers were killed and two are missing after intense fighting with Somali insurgents.

Spokesman Lt. Col. Paddy Ankunda said on Friday that casualties occurred when AU soldiers took the last neighbourhood held by Somali insurgents in Mogadishu on Thursday.

Two soldiers were missing and an armored vehicle had been burned, he said.

Witnesses said the Al Shabab militia later displayed more than 60 bodies and spokesman Shaikh Ali Mohamud Rage said they had killed 70 AU soldiers.

Many of those displayed wore flak jackets and helmets - equipment that is issued to AU soldiers but not government troops or insurgents. But Ankunda insisted Al Shabab had dressed up the bodies for propaganda.