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* Clinton to announce step in meeting with Somali leader
* US says Somalia has progressed since 'Black Hawk Down'
* Move could ease new assistance from World Bank, IMF
By Andrew Quinn
WASHINGTON, Jan 16 (Reuters) - The United States will on Thursday officially recognize the Somali government in Mogadishu, ending a hiatus of more than 20 years and opening the door to increased U.S. and international economic help for the violence-plagued African nation, a senior U.S. official said on Wednesday.
U.S. Secretary of State Hillary Clinton will announce the shift during a meeting with visiting Somali President Hassan Sheikh Mohamud, whose election last year marked the first vote of its kind since warlords toppled military dictator Mohamed Siad Barre in 1991, Assistant Secretary of State Johnnie Carson told reporters.
"When the secretary meets with Hassan Sheikh tomorrow, she will exchange diplomatic notes with him and recognize the Somali government in Mogadishu for the first time in 20 years," Carson told a news briefing.
The United States never formally severed diplomatic ties with Somalia, whose slide into anarchy was highlighted by the 1993 "Black Hawk Down" incident which saw militia fighters shoot down two U.S. military helicopters over Mogadishu.
In subsequent years, al Qaeda-linked al Shabaab insurgents seized control of large areas in the south and central parts of the country before Ethiopian, Kenyan and African peacekeeping (AMISOM) troops began a long, U.S.-supported counter offensive aimed at restoring order.
The formation of the new government led by Mohamud is the culmination of a regionally brokered, U.N.-backed effort to end close to two decades of fighting that has killed tens of thousands of people.
Carson said the U.S. decision to formally recognize the new government underscored the progress toward political stability that Somalia has made over the past year, including "breaking the back" of the al Shabaab insurgency.
"We are a long way from where we were on Oct 3, 1993 when Black Hawk Down occurred in Mogadishu," Carson said.
"Significant progress has been made in stabilizing the country, in helping to break up and defeat al Shabaab. Much more needs to be done, but we think enormous progress has been made and we have been at the very center of this in our support for AMISOM."
Continued security concerns in Somalia were highlighted over the weekend when French commandos failed to win the release of a French agent held by militants since 2009 during a helicopter raid in southern Somalia.
STEPS TOWARD MORE AID
Clinton does not intend to announce any specific new aid packages for Somalia, which already receives significant U.S. humanitarian assistance for drought, famine and refugee relief, one senior U.S. official said.
But formal U.S. recognition of the new government paves the way for new flows of assistance both from the U.S. Agency for International Development (USAID) and other U.S. agencies as well as from international actors such as the World Bank and the International Monetary Fund.
"The fact that we recognize a government there will allow us to do things through USAID that we have not been able to do before. The fact that we recognize them as a legitimate government will allow the World Bank and the IMF to do things that they would not have been able to do before. This is major and it is significant," the official said.
Mohamud and his team met with senior USAID officials as well as World Bank President Jim Yong Kim during their trip to Washington, U.S. officials said.
The senior U.S. official said the United States did not have any immediate plan to reopen an embassy in Mogadishu but indicated that this could also eventually follow Thursday's announcement. U.S. policy on Somalia is currently handled by a special envoy based out of Nairobi.