Ethiopia said it has made the move to protect its weak transitional government from a feared Islamist advance.
Hardline Sheikh Hassan Dahir Aweys said Somalia will not condone further incursions from Ethiopia, as hundreds of people demonstrated in the capital Mogadishu in support of the Islamists.
"The Somali people have to fight against Ethiopia, this is a holy war in which we are defending our country," Sheikh Aweys said on a nationwide local radio.
"The Ethiopians have invaded our country and we must force them out of the country and this will be a holy war of jihad," said the supreme leader of the Supreme Islamic Council of Somalia (SICS).
Sheikh Aweys is a hardline cleric designated as a terrorist by the US for suspected links to Osama bin Laden's al-Qaeda network.
The Islamists, who have taken control of the capital, Mogadishu, and much of southern Somalia, have demanded the immediate withdrawal of Ethiopians.
According to eyewitnesses, Ethiopia has sent more military vehicles into Baidoa, the seat of the transitional government.
"The Somali people are ready to defend themselves from the acts of aggression by Ethiopia," said Sheikh Sharif Sheikh Ahmed, chair of the executive committee of the SICS.
"What the Ethiopians have done is an act of violence that undermines the sovereignty of Somalia," he said in a local radio broadcast. "The Somali people have to defend themselves and (we) are ready to spearhead that defence."
"We will fight and die to defend Somalia from an Ethiopian military attack," Sheikh Ahmed said from Mogadishu, where the Islamists seized control from a US-backed alliance of warlords last month.
"Anybody who supports the Ethiopian is a traitor."
In Baidoa, about 250 km north-west of Mogadishu, residents said at least nine more large Ethiopian military vehicles carrying supplies, but no troops, moved into the town early Saturday.
"Nine big trucks arrived in Baidoa carrying logistics for the Ethiopian troops," Baidoa resident Hassan Moalim Ahmed told AFP.
"There were no soldiers in the lorries, but they had food and military items."
These followed an initial convoy of more than 100 trucks with several hundred Ethiopian soldiers that witnesses said rolled into Baidoa and surrounding areas Thursday, after Islamist militia advanced on a nearby town.
The Islamists have repeatedly denied they were planning or are planning to attack Baidoa, but their success in taking Mogadishu and asserting control elsewhere is a challenge to the largely powerless government headed by Abdullahi Yusuf Ahmed.
Ethiopia, which is dominantly Christian, along with some western countries, fears the rise of a fundamentalist Islamic state in Somalia, which has been without a functioning central government for the past 16 years.
Ethiopia has said it will defend the transitional government from attack by the Islamists, whom it and the US accuse of harbouring extremists including al-Qaeda members wanted for attacks in east Africa.