"We have overpowered al Qaeda and al Shabaab in Somalia, they are weak and now melting away," said President Sheikh Sharif Ahmed, whose Horn of Africa country has been without effective central government since 1991.
"(Mohammed`s) death is a major setback to al Shabaab and al Qaeda... He was a great burden to our government and to the neighbouring countries," Ahmed told reporters.
Mohammed reputedly ran al Qaeda in east Africa from his base in southern Somalia, where he hid for more than a decade after being accused of playing a lead role in 1998 U.S. embassy attacks in Nairobi and Dar es Salaam, which killed 240 people.
U.S. Secretary of State Hillary Clinton, who is on a visit to Tanzania`s capital Dar es Salaam, said that al Qaeda had suffered a blow with the death of Osama bin Laden, and another "significant blow" with the death of Mohammed.
"Some of you lost loved ones... we have not forgotten your losses," said Clinton. Mohammed had been responsible for "despicable acts" which killed hundreds and injured thousands during his career, she said.
"We have not forgotten our pledge to seek justice against those who would commit such atrocities," she said after laying a wreath during a memorial service at the embassy.
Security forces shot Mohammed at midnight on Tuesday at a checkpoint after an exchange of fire in the chaotic rubble-strewn streets of the capital Mogadishu.
Analysts said his death robbed al Qaeda and Somali affiliate al Shabaab of its most skilled operator and trainer, a master of attack planning as well as a computer expert with at least 18 aliases and a flair for disguise, forgery and bomb-making. (*)
Editor: Kunto Wibisono
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