But Secretary-General Ban Ki-moon said the government still faces many challenges, first and foremost dealing with widespread insecurity and a recent upsurge in attacks, assassinations and abductions.

He said the increased violence has led to a worsening humanitarian crisis in Somalia which has made the delivery of aid "extremely dangerous" at a time when fighting and drought are increasing the need for life-saving assistance.

In a report to the Security Council, the U.N. chief urged the government "to stay the course" _ and he appealed to the international community "to redouble its support and rally support behind the government."

Ban said the United Nations stands solidly behind the African Union and its 5,200-strong force in the capital, Mogadishu, which lost 17 soldiers when two vehicles exploded in an area controlled by the AU on Sept. 17. The attack also claimed the lives of at least 4 civilians.

Somalia has not had an effective government since 1991 when warlords overthrew longtime dictator Mohamed Siad Barre and then turned on each other, plunging the country into chaos and anarchy.

The fragile U.N.-backed government and an undermanned, poorly resourced African Union peacekeeping force have struggled to defend government buildings, the port and airport in the capital, Mogadishu. Two allied Islamist insurgent groups _ al-Shabab and the Islamic Party _ launched an offensive after the return of an exiled insurgent leader in April that killed hundreds of Somalis and forced tens of thousands to flee their homes.

Ban said the transitional government, in recent months, "has successfully weathered threats to its existence from extremist forces and garnered substantial domestic and international support."

The African Union force, known as AMISOM, "has played a critical role in repelling the insurgents and continues to protect vital installations in Mogadishu," he said.

While many challenges remain, he said there has been "some encouraging progress" toward national reconciliation, drafting a constitution, and building up Somalia's security forces.

But the secretary-general warned that further progress to promote the peace process requires greater efforts to consolidate the government's authority and deliver services to the impoverished population.

He welcomed "the unwavering commitment" of President Sheik Sherif Sheik Ahmed and his government and again urged all opposition groups to lay down their arms and join the reconciliation process "for the good of the country."

The secretary-general said he was concerned at the lack of adequate funding for high priority humanitarian and economic recovery programs. He said he was equally concerned at the continuing criminal activities in Somalia including drug trafficking and arms smuggling.

This has resulted "in some individuals accumulating significant wealth and acting as spoilers to the peace process," Ban said. "This is unacceptable, and I call on the international community to find ways to address illegal activities that threaten peace in Somalia and the wider region."