Somalia’s al Qaeda–linked militants Al-Shabab abandoned their financial stronghold, the port city of Kismayo, under assault today by African Union and Somali forces. Taking Kismayo has long been seen as delivering the knockout blow to the Islamist group, who relied on the port to supply guns and generate revenue. Without that key connection to the outside world, Al-Shabab loses millions in annual funds, undercutting its ability to continue controlling vast swaths of the country.

But the threat they pose is far from gone. Even as an Al-Shabab spokesman announced a “tactical retreat,” the group’s Twitter feed (@HSMPress) threatened further bloodshed: “#Kismayo shall be transformed from a peaceful city governed by Islamic Shari'ah into a battle-zone between Muslims & the Kuffar [infidel] invaders.”

“Operation Sledge Hammer,” carried out by the Kenyan contingent of the African Union peacekeeping mission in Somalia and Somali government troops, began before dawn on Friday morning when the allied forces stormed the beach north of Kismayo. Kenyan forces “met no resistance whatsoever” during the offensive, says army spokesman Col. Cyrus Oguna. But overnight Kenyan forces repelled a lorry carrying heavily armed Shabab fighters who attacked the African Union in Somalia (AMISOM) position in the northern part of the city, killing five militants, according to the Kenyan army spokesman.

For their part, Shabab described “fierce fighting” and touted attacks on Kenyan armored vehicles on Friday but confirmed it had “closed its offices” in the city on Saturday.

“We have yet to confirm whether Al-Shabab has retreated” from the city, Oguna said, adding that it “may take time to spread troops throughout the city.” With the attack on Kismayo weeks in the making, it’s likely that Al-Shabab has laid mines in strategic parts of the city.

The U.N. refugee agency reported Friday that more than 12,000 of Kismayo’s 200,000 residents had already fled the city, amid growing tensions and aerial bombardments ahead of the ground offensive. In addition to insecurity, those arriving in refugee camps cited forced recruitment as one of their main concerns.

“In the past, when Al-Shabab came under pressure in terms of manpower, they’ve resorted to recruitment of children,” says Laetitia Bader, Human Rights Watch’s Somalia researcher.

“A lot of people stuck in town are those who couldn’t afford to leave,” Bader says. “People are concerned about what will happen once a new force comes to town, and especially concerned about reprisal attacks against them.”

Human Rights Watch reported this week on a spate of killings of journalists and called on the government to investigate. Al-Shabab claimed that a suicide bombing on Sept. 20 that left at least 15 people dead, including three journalists, was carried out by supporters of their group but said it didn’t order the attack. The killing of sports reporter Abdirahman Mohammed Ali by beheading also bears the hallmark of Al-Shabab and took place in a district of Mogadishu, where the group is known to have a strong following.

Targeted killings, suicide bombings—like the one attempted against Somalia’s new president earlier this month, on his second day in office—and even regional attacks look to be the future of the group, analysts and observers say.

It’s unclear at the moment where the key Al-Shabab leaders have retreated to, though Newsweek sources suggest that some of the foreign fighters and ideological leaders may try to make their way to Yemen or Eritrea.

But many of Al-Shabab’s fighters will be able to blend back into their communities, putting down their guns or else going underground. Many will no doubt wait to see how the upcoming weeks and months play out.

“Al Shabab will continue to be a dangerous organization,” says a Western official in Nairobi, who asked to not be named because he wasn’t authorized to speak publicly. The loss of Kismayo is “a major blow to its reputation, a major blow to its finances, but it will continue to operate as a terrorist group,” he says.

Islamist militants tend to move in to the vacuum once the local administration and stability it brings—even enforced ruthlessly—ends. The situation in Kismayo, as in the many other areas newly claimed by the A.U. peacekeepers and Somali troops, will pose a significant challenge for the fledgling government, experts say, because even with a defeat of Al-Shabab in its current form there will be an abundance of underemployed men, armed and aimless.