"We will order all our holy warriors to start the jihadi war inside
Foreign Affairs Minister Moses Wetangula has been quoted recently offering the training to beleaguered government forces.
The warning comes as insurgents have again battled government troops and peacekeepers in the capital,
At least five people have been killed, residents and doctors say.
A witness told the BBC there were clashes near an African Union peacekeeping base at the strategic K-4 junction and that mortars were used.
The Islamists have increasingly targeted the AU peacekeeping force in recent months, as well as the government and their Ethiopian allies.
The K-4 junction is strategically placed in the south of the city linking the airport and the presidential palace, and some AU peacekeepers are based there.
The witness said he could see houses on fire, and heavy gunfire could be heard in the background.
The government is recognised by the international community but correspondents say it only controls a few patches of the country.
Ethiopian troops helped the government push Islamist forces from control of central and southern
On Thursday, Ethiopian Prime Minister Meles Zenawi said
Even if Ethiopian troops left, he said, they could still return if the powerful Islamist militia al-Shabab threatened to take power.
"Whenever there's a threat posed, we will come back to break their backs," he said.
"Any government is preferable to the Shabab. It's in the interest of
More than three million people - almost half of
Aid agencies recently estimated that 1.1 million people had been uprooted from
But the mission, which is made up of troops from
Mr Meles said Ethiopian troops would remain in