Somalia's peace process is facing collapse and the country risks becoming a dangerous failed state, a new report says. The International Crisis Group (IGC), a conflict resolution organisation, said on Tuesday that a genuine government of national unity needs to emerge to save the country. Despite the apparent progress indicated by the declaration of a Somali Transitional Federal Government (TFG) in October 2004, the peace process is very fragile, said the Brussels-based organisation. The IGC said the TFG had made no real attempt to effect reconciliation inside Somalia, and there had been little progress towards resolving the many issues that had divided Somalis for years. Still controlled by a patchwork of factions, Somalia's land remains occupied, and violations of the ceasefire and UN arms embargo are rife. "The Transitional Federal Government has to tackle these issues, while earning the legitimacy to do so effectively," said Matt Bryden, an IGC senior analyst. **Protracted crisis*** "If it does not, then the peace process will stall and Somalia's stubborn leaders will likely return to all-out violence," he said. After nearly 15 years of statelessness and civil strife, and two years of arduous peace negotiations in Kenya, Somalia seemed to be emerging from its protracted crisis. But the peace process has gone largely downhill since then. The 15 December deadline for the TFG's return to Somalia expired with it still in Nairobi, citing insecurity in its homeland. The transitional parliament, also in Nairobi, elected Colonel Abdallahi Yusuf Ahmad as interim president. For many Somalis, this was not a step towards peace because, they claim, he heads an armed group. Yusuf sidestepped the transitional charter to appoint his candidate as prime minister, who then put together a large cabinet heavily weighted with Yusuf allies. **National unity*** Several appointees immediately resigned, and the remainder were voted out by parliament in a session that degenerated into fisticuffs, forcing the dissolution of the entire cabinet. Rather than attempt to impose their own agenda on the transition, the IGC said Yusuf and his partners needed to form an inclusive, broad-based transitional government of national unity. The international community must make clear that only if this happens will the TFG get recognition and desperately needed support, said the organisation. "The longer the political process remains gridlocked, the less hesitation dissatisfied groups will have about withdrawing from the process and becoming armed opposition," said Suliman Baldo, the IGC's director of Africa programme. Somalia has been without a central government since President Siad Barre was overthrown in 1991. Fighting between rival factions, and famine and disease have led to the death of up to one million people since then. **PHOTO CAPTION*** Armed Somali militiamen ride a vehicle as they protect the delegation of U.N. emergency relief coordinator Jan Egeland during the visit in Wajiid, south central Somalia on December 5, 2004. )REUTERS(