An Indian warship loaded with six-barreled 30-millimeter machine guns for close combat opened fire on a pirate ship, sinking the vessel off the coast of Somalia, a spokesperson said Wednesday.

The pirates, equipped with machine guns and rocket-launchers, sparked the gunfight by first attacked the INS Tabar, a 120-metre frigate, according to Cmdr. Nirad Kumar Sinha, a spokesperson for the Indian Navy.

He said the pirates were on a "mother ship," a large vessel used to extend the range of their activity, giving them a remote base from which to launch smaller boats.

During the five-hour battle, the pirate ship burst into flames.

"As a result of the firing by INS Tabar, fire broke out on the vessel and explosions were heard, possibly due to exploding ammunition that was stored on the vessel," said Sinha in a statement released Wednesday. "Almost simultaneously, two speedboats were observed breaking off to escape. The ship chased the first boat which was later found abandoned. The other boat made good its escape into darkness."

Indian commandos also foiled a hijacking last week when they prevented pirates from boarding a merchant vessel.

Pirate ships have been roaming the Gulf of Aden, where modern-day buccaneers have captured several ships over the past few years.

Meanwhile, separate gangs of pirates also hijacked two more ships near Somalia.

The captured Thai ship and Iranian cargo vessel had forty crew members, who are believed to have been taken captive.

In total, various groups of pirates have control of 17 vessels along with their 300 crew members. The captured ships include a Ukrainian ship carrying weapons and a Saudi supertanker with a US$100-million-load of crude oil.

Pirates bring wealth to poor towns

Somali pirates have managed to acquire more than US$25 million through ransoms this year, according to a report released Tuesday by the United Nations. Villages and towns dotting the African country's coastline can be seen with massive stone houses and luxury cars -- a blatant anomaly in a country plagued by extreme poverty.

"The pirates depend on us, and we benefit from them," Sahra Sheik Dahir, a shop owner in Harardhere, told The Associated Press.

Haradhere is a village close to where the hijacked Saudi supertanker has been anchored.

Somalia has lacked an effective central gorvenmetn for roughly 20 years. Poverty and violence is so extreme, the average life expectancy is only 46 years.

Dahir said the pirates bring wealth to coastal communities, raising the quality of life.

"They always take things without paying and we put them into the book of debts," she told The Associated Press by telephone. "Later, when they get the ransom money, they pay us a lot."

Ahmed Hussen, the head of the Canadian Somali Congress, said piracy has become a "huge industry" in Somalia, an impoverished nation which has had a broken federal government for nearly two decades.

He told Canada AM from Ottawa that the piracy problem has been exacerbated by the failure of international intervention in the country. He said the country has had to deal with "decades of neglect" and "inefficient peace plans."

That has left "a lot of militiamen with not much to do," he said.

The hijackings have been extremely profitable, says an international terrorism expert.

Will Geddes, who set up one of Britain's first corporate security firms, told Â鶹´«Ã½net from the U.K. on Wednesday that since the mid-1990s, north African pirates have probably collected about $100 million in ransom.

"They've run a very profitable operation," he said, noting that they're part of a "very sophisticated network."

He added that it will be difficult to completely destroy the 1,000-member pirate network because they are currently holding about 250 hostages.

"They have all the bargaining chips in their favor."

A Canadian vessel was temporarily among a multinational coalition that patrols the Horn of Africa, but the effort has not stopped the spate of hijackings.

Retired Vice Admiral Peter Cairns told CTV's Canada AM on Wednesday that this is a global issue that needs to be addressed through increased international co-operation.

Cairns, who is currently the president of the Ship Building Association, said more countries need to get involved in what is becoming a major problem not just in the waters off Somalia, but in other areas of the world as well.

"Our navy cannot deal with it by itself. It has to be an international effort, and that is what has been lacking," he said.

"You need to have significant intelligence. You need to have navies to step in at the right time to prevent these."

Cairns also noted that the pirates have been propped up by some of Somalia's poorest people.

"There is backing by a lot of people to support these pirates because that is one of the major source of income that some of these regions of Somalia have -- in fact, the only source of income," he said.