By Arshad Mohammed and William Maclean
LONDON (Reuters) - Secretary of State Hillary Clinton on Thursday threatened sanctions on anyone blocking reforms intended to end Somalia's "hopeless, bloody conflict" and counter militant and pirate groups seen as a growing menace to world security.
Addressing a conference aimed at energizing attempts to end more than 20 years of anarchy, Clinton also demanded greater efforts to cut funding for al Shabaab militants fighting Somalia's weak Transitional Federal Government (TFG).
But in response to a reporter's question she cautioned against Western air strikes on al Shabaab-held zones, adding she had no reason to believe anyone was contemplating them, and Britain's International Development Secretary Andrew Mitchell told the BBC the UK had no plans "for anything like that."
Al Shabaab is the most powerful of an array of militias spawned by the conflict in Somalia, where armed groups have a history of wrecking attempted political settlements and perpetuating war, instability and famine.
"The position of the United States is straightforward: attempts to obstruct progress and maintain the broken status quo will not be tolerated," Clinton told the one-day gathering in London of about 40 African, Arab and Western leaders and government ministers.
"We will encourage the international community to impose further sanctions, including travel bans and asset freezes, on people inside and outside the TFG who seek to undermine Somalia's peace and security or to delay or even prevent the political transition."
A conference communiqué said participants agreed to "act against spoilers to the peace process, and we would consider proposals" before a followup conference in Istanbul in June.
In a statement, al Shabaab dismissed the London meeting as part of a "concerted Crusade against the Muslims of Somalia" and pledged to fight on to establish Islamic rule.
TFG President Sheikh Sharif Ahmed said Somalis wanted to shake off "horrendous memories of the past" but feared the gathering might be just another diplomatic talking shop.
"Today we are looking for security. We are scared," he said. "We want to know what happened to the resolutions, all those hopes in the past which never saw the light of day and which remain as mere words on pieces of paper?"
Clinton and other speakers welcomed a February 17 agreement among Somali leaders on plans for a parliament and constituent assembly to replace the TFG when its mandate expires in August.
Establishing a legitimate successor government seen as inclusive by the fractious clans would be a vital step in encouraging involvement in formal politics by Somalis who tend to equate state power with corruption and brutality.
In a remark likely to stir attention in Mogadishu, Clinton raised the possibility of what she called "a more permanent diplomatic presence in Somalia" as security improves.
U.S. diplomacy is currently managed from neighboring Kenya. The United States closed its embassy in Mogadishu in 1991, the year Somalia collapsed into feuding between warlords, clans and factions after president Mohamed Siad Barre was overthrown.
Up to a million people have since been killed, according to the International Committee of the Red Cross (ICRC).
The TFG got a boost on the eve of the conference when the U.N. Security Council voted to increase by nearly half an African Union peacekeeping force in Somalia, seeking to press home a military offensive against al Shabaab.
But some experts worry that the military campaign against al Shabaab may divert the energies of the TFG, a body widely seen as corrupt, badly managed and riddled with infighting.
Clinton said al Shabaab was weakening but pressure needed to be maintained. "Especially in south-central Somalia, it has turned an already bad situation into a nightmare. It has dragged fathers and sons from their homes and forced them to fight in a hopeless, bloody conflict," she said.
There was no military rationale for air strikes on al Shabaab, Clinton added, saying AMISOM and TFG forces were doing a "very good job" against al Shabaab.
However, security experts say they suspect U.S. drones have been used in attempted pinpoint attacks on individuals in Somalia suspected of al Qaeda membership.
British Prime Minister David Cameron told the gathering that a failure to end Somalia's chaos would endanger international security, arguing Somalia's problems affected the whole world because "chaos, violence and terrorism" thrived there.
Cameron announced several aid and development initiatives including a proposal to set up an international taskforce on ransoms, the main tactic used by Somali pirates who seize ships and their crews in the Indian Ocean and Gulf of Aden.
Many Somalia watchers echoed President Sharif's apparent skepticism about the utility of Thursday's meeting, recalling Somalia's history of blunder-prone outside intervention.
"One can legitimately argue that ... Somalia's enduring 'failed state' existence has been because of international community involvement, the precise opposite of Cameron's argument that it has been ignored," said Hannah Waddilove, Africa analyst with security firm AKE.
She said the conference appeared to have been motivated largely by Britain's need to address terrorism concerns in the year the country holds the summer Olympic games.