Abu Khalid was critically wounded Dec. 6 during heavy fighting between the insurgents and forces of the Western-backed Transitional Federal Government in the Somali capital, backed by peacekeeping troops of the African Union, the Sunatimes Somali Web site reported.
He was taken to an al-Shabaab hospital north of the city where he died, an al-Shabaab commander told Sunatimes.
Abu Khalid is understood to have replaced Abu Musab, another al-Qaida leader who was killed in fighting in Mogadishu several months ago. Both were senior members of al-Qaida in the Arabian Peninsula, based in Yemen, is the most effective and dangerous al-Qaida affiliate currently operating.
It has been involved in several attacks and attempted attacks against the United States in recent months. These were the November 2009 killings at Fort Hood, Texas, the attempted Christmas Day 2009 bombing of a Northwest Airlines jetliner over Detroit and the U.S.-bound parcel bombs discovered aboard aircraft in Britain and the United Arab Emirates last month.
AQAP has operational ties with al-Shabaab, a militant Islamist group linked to Osama bin Laden's al-Qaida core leadership, which has been fighting to topple the U.S.-backed TFG in Mogadishu since December 2006.
Al-Shabaab is estimated to have 10,000 to 15,000 fighters.
In late 2009, bin Laden reportedly named his top lieutenant in East Africa, Fazul Abdullah Mohammed, as al-Qaida's operations chief in the region.
Fazul, from the Comoros Islands off East Africa, has been active for two decades. He was indicted in the United States for masterminding the August 1998 bombings of the U.S. embassies in Kenya and Tanzania.
According to the Long War Journal, a U.S. Web site that tracks global terrorism, Fazul served as al-Shabaab's intelligence chief before replacing the group's leader, Saleh Ali Saleh Nabhan, killed by U.S. Special Forces in southern Somalia Sept. 14, 2009.
These are only some of the hard-core al-Qaida operatives who have been reported in Somalia in recent times.
Dozens, possibly scores, of al-Qaida veterans from Yemen, Afghanistan, Iraq and Pakistan have been reported to have deployed in Somalia to reinforce al-Shabaab.
The group has suffered several reverses in recent months and appears to be torn by internal divisions. These include differences over whether it should accept foreign jihadists or stick to its own nationalistic objectives.
The TFG's information minister, Abdirahman Omar Osman, claimed in October the group had "lost hundreds of fighters in the Ramadan offensive" aimed at driving the TFG out of its only foothold in Mogadishu.
With Yemen's inept and corruption-plagued regime facing possible collapse as it grapples with major security and economic crises, including AQAP's escalating campaign, there are fears it could end up like chaotic Somalia, which has been without a central government, functioning or otherwise, since 1991.
That, intelligence strategists believe, would mean two failed states, ripe of exploitation by al-Qaida, in the Horn of Africa region, astride vital shipping and oil tanker routes through the Red Sea.
"The world cannot afford Yemen becoming a failed state a la Somalia," declared Bruce Riedel, a former CIA analyst who advised U.S. President Barack Obama's administration on counterterrorism.
"One failed state on the Gulf of Aden is bad enough," said Riedel, currently an analyst with the Brookings Institution in Washington.
"Two failed states on the Gulf of Aden with al-Qaida operating in both of them would be a very dangerous situation since the Gulf of Aden's where the world's energy resources sail through every day."
Some analysts say al-Shabaab's efforts to coordinate with bin Laden's core leadership indicate an eventual merger between the two groups.
The Long War Journal noted when reporting the death of Abu Khalid that several other foreign al-Qaida operatives hold senior positions in al-Shabaab. They include Sheik Mohammed Abu Faid, a Saudi Arabian, who is a "top financier and manager," Abu Musa Mombasa, a Pakistani who serves as the group's security and training chief, and Mahmoud Mujajir, a Sudanese who is the chief recruiter for suicide bombers.