Gunmen in Somalia's northeastern Puntland province hijacked a cargo plane carrying khat, a narcotic leaf, on Thursday after a business deal turned sour, a local official said.

The attackers seized the plane, which had come from Ethiopia, in Puntland's port of Bosasso. They then flew 150 km (90 miles) west to another coastal town, Las Qorey, the chairman of the area, Muse Gelle Farole, told Reuters.

'There was a conflict between the businesspeople that brought the khat to Bosasso, so one group of them hijacked the plane and made it land at Las Qorey,' he said.

Farole said two armed men were holding three crew members. 'We sent troops and elders to try to resolve the crisis either peacefully or forcefully,' he said.

Commonly chewed across the Horn of Africa region, khat is especially popular in Somalia where planes arrive daily from neighbouring countries with the lucrative commodity.

Known for its relative stability in a country mired in chaos since the 1991 ousting of a dictator, semi-autonomous Puntland has nevertheless suffered a spate of pirate attacks off its coast in recent months.

In a separate development, authorities in the lawless capital Mogadishu said they would increase the number of troops patrolling the city.

Residents there are plagued by almost daily attacks by suspected Islamist insurgents fighting the interim government and their Ethiopian military allies.

'Both Somali and Ethiopian forces will be be operational in every neighbourhood and district in Mogadishu,' said deputy police spokesman Abdiwahid Mohamed Hussein.

'We hope that this major military operation will settle Mogadishu,' he said. Two civilians were killed on Thursday, witnesses said, when a gunman hurled two grenades at government troops patrolling Bakara market, where a fire devastated many shops this week. - Reuters