Veteran Somali politician Mohamed Osman Jawari, a former minister, was elected as the speaker of the war-torn nation's new parliament, the outgoing interim speaker said Tuesday.

The United Nations-backed process, which will culminate in lawmakers choosing the country's new president, is the latest bid to end two decades of instability in the Horn of Africa nation.

"After a successful election which was conducted in a transparent way, I declare... Mohamed Osman Jawari to be the speaker of the Somali parliament," said Musse Hassa Abdulle, the oldest lawmaker in the house.

Somalia has not had a stable central government since the 1991 ouster of dictator Mohamed Siad Barre, which sparked rounds of bloody civil war.

Jawari, a minister under Siad Barre, is a legal expert who helped draft a new constitution for the war-torn nation, working alongside the UN.

The selection of speaker will impact the subsequent parliamentary vote for president, as Somali politicians have traditionally tried to share out the seats between rival clans.

The contest for president is expected to begin within days. Bitter arguments have begun between challengers for the country's top job, divided along Somalia's notoriously fractious clan lines.

Jawari is from the Rahanweyn clan from the southern Baidoa region.

Five candidates began the race Tuesday for the powerful post of speaker, but Jawari won the first round of the secret ballot by over 40 votes.

As he prepared to face a second-round ballot, the only other remaining contender -- former prime minister Ali Khalif Galayr, from the Darod clan in the northern Puntland region -- conceded defeat.

"I have resigned and I am not running for the speaker of the Somali parliament, I am thanking all those who voted for me and for the others," Galayr told lawmakers.

The election clears the way for the presidential bid of outgoing prime minister Abdiweli Mohamed Ali, a US-educated economist who comes from Puntland.

However, it is likely to complicate the bid of former speaker Sharif Hassan Sheikh Adan, who comes from the same Baidoa region as Jawari.

Outgoing president Sheikh Sharif Sheikh Ahmed, in power since 2009, is one of the favourites for the top job, though he cuts a controversial figure with Western observers.

A UN report in July said that under his presidency, "systematic embezzlement, pure and simple misappropriation of funds and theft of public money have become government systems" -- claims Sharif has rejected.

Under the UN-backed process, members of the new parliament are selected by a group of traditional elders.

Around 260 of the legislature's 275 members have been chosen so far, the majority sworn into office last week on the tarmac of the capital's airport, protected by African Union troops.

The nearly 17,000-strong AU force has propped up Somalia's Western-backed leadership against attacks by the country's Al-Qaeda-linked Shebab insurgents.