"Tension is really high, sporadic shots can be heard and the two groups have beefed up their positions with the arrival of heavily-armed fighters," Ali Abdulahi Hussein, an Afgoye resident told AFP.
"We're ready to run if fighting breaks out here.
But unfortunately many of the displaced families have nowhere to go," Ahmed Idle, a resident of a nearby village said.
The Al-Qaeda-inspired Shebab control the bulk of south and central Somalia and most of the districts of Mogadishu.
Hezb Al-Islam, a more political movement that was founded in 2007 and headed by Hassan Dahir Aweys, has its strongholds in the north western outskirts of Mogadishu and in the extreme south of the country.
The two fight together in the capital against the forces of the transitional government and their African Union allies, but for the past year they have been engaged in an intense and sometimes violent struggle for influence in the south, notably Kismayo, a big port that the Shebab seized in late 2009.
In early December the Shebab attacked the strategic town of Burhakaba, 180 kilometres (110 miles) south east of Mogadishu, wresting control of it from Hezb Al-Islam, who had held it since 2008.
On the road linking Mogadishu to Baidoa, the major town in southern Somalia, Burhakaba serves as a gateway to the whole of the south.