Ethiopia branded the casualty report a fabrication.

Eritrean television and radio said late Friday that 2,400 Ethiopian troops were killed and 4,000 were wounded, while Eritrea had taken 80 prisoners, shot down one Ethiopian MI 35 helicopter gunship and destroyed three tanks. ``The fighting is continuing,'' Eritrean presidential spokesman Yermane Gebremeskel told Reuters Saturday.

``The casualty toll was high because the Ethiopians concentrated their attack -- they used two divisions in the attack which is about 20,000 soldiers,'' he said. Yermane declined to comment on Eritrean casualties.

In Addis Ababa, officials accused Eritrea of lying about Ethiopian losses.

``This is the usual Eritrean fabrication aimed at getting media attention,'' government spokeswoman Selome Taddesse told Reuters.

The latest battle on the western front, close to the disputed Badme area where war first broke out last year, began Thursday, with each side accusing the other of firing the first shot.

Tens of thousands of soldiers are thought to have died in the war which has raged intermittently on three fronts along the 600-mile border for over a year.

Eritrean media also reported continued fighting Friday on the southern Burre front close to Eritrea's Red Sea port of Assab, and a skirmish on the central front.

The Eritrean government says Ethiopia has thrown two "full divisions" into the battles on the western front along the Mereb and Setit rivers.

Ethiopian divisions number between 7,000 and 11,000 men, which would indicate that something of the order of 20,000 Ethiopians are fighting there.

Asmara did not disclose the number of its own men and women involved -- women make up one in four of Eritrea's front-line fighters -- but in past battles their numbers have been close to the Ethiopians.

Each side has accused the other of starting the current offensives, which began on Wednesday with fighting on the eastern Burie front -- Asmara described that as a diversionary attack by the Ethiopians -- followed by heavy fighting on the western front, beginning on Thursday.

Attacking infantry must advance through minefields as the two sides exchange artillery, tank and heavy machine-gun fire, and Addis Ababa is again deploying its fighter-bombers despite a US-brokered moratorium on air-strikes signed in June last year.

Both sides say the previous big battles left thousands dead, and thousands more wounded.

The major fighting has been interspersed with long lulls and skirmishing.

Both sides have accepted an Organisation of African Unity (OAU) peace plan which provides for demilitarization of the border, deployment of peacekeepers, and neutral demarcation of the frontier.

However, that plan has long been moribund because both sides are dug in behind their own interpretation of it, and Ethiopian leaders have made it clear in numerous statements that they intend to fight on unless the Eritreans withdraw from all disputed territory.

Ethiopian Prime Minister Meles Zenawi warned once again on May 30 that his government would resort to force "if the invasion army does not withdraw in a peaceful manner."

All mediators shuttling between the two capitals and trying to resolve the war on the basis of the OAU plan have run into brick walls in both capitals, sometimes barely being received.

The war ignited in May last year after Eritrean troops occupied Badme on the western front and other localities along the border, which is some 1,000 kilometres (600 miles) long, claiming they were in fact in Eritrean territory.

The Eritreans accused Ethiopia of earlier having occupied an Eritrean hamlet on the eastern front.

The OAU plan calls specifically for Eritrea to withdraw from Badme and its environs, but Ethiopia's leaders told the OAU that they interpreted this to mean that Eritrea must withdraw from the other locations as well.

The Ethiopians pushed the Eritreans out of Badme at the end of February, but Asmara refuses to pull back its troops from the disputed locations on the central front.

Ethiopia on Friday accused the Eritreans of having launched an offensive to recapture Badme, a hamlet in desolate, stony territory which Addis Ababa has used as a symbol of Eritrean aggression.

Any decisive victory by either side on the western front is unlikely to end the war, however, analysts say, because the Eritreans remain in such disputed central front locations as Zala Anbesa.

More than half a million Ethiopian and Eritrean civilians living along the border have meanwhile been displaced, and the United Nations is spending 40 million dollars on feeding them.

Analysts say the war has its roots in political and economic differences between Ethiopia and its former province.

The two countries are among the poorest in the world, but both are spending large sums on armaments.

Ethiopia, with more than a million square kilometres (close to 40,000 square miles) has a population of close to 60 million.

The privately-owned Al-Rai Al-Aam newspaper described the visit as a milestone for Eritrean President Isayas Afewerki, as the government had previously made it clear there would be no improvement in relations unless the opposition left Eritrea.

``Some sources are surprised at the visit of the Sudanese delegation to Asmara at this time and they say Afewerki achieved a big gain as Khartoum is no longer preventing normalisation of ties with Asmara despite the presence of the opposition there,'' Al-Rai Al-Aam reported.

In the Eritrean capital Asmara, the minister handed over a message to Afewerki from Sudan's President, Lieutenant-General Omar Hassan Al-Bashir, and met Eritrean officials including the foreign minister, the government-owned Al-Anbaa newspaper said.

``Dr Ghazi Salahuddin told Al-Anbaa newspaper that his visit came within the context of consultations between Khartoum and Asmara to normalise relations and remove obstacles in all fields,'' the paper said but gave no other details.

The leadership body of the Sudanese opposition, the National Democratic Alliance (NDA) is meeting in Asmara. Eritrea has in the past accused Sudan of supporting Moslem militants and broke off diplomatic ties in 1994. Sudan denied the allegation and accused its eastern neighbour of backing rebels.

Kassala, on the frontier with Eritrea, has borne the brunt of recent fighting between Sudanese government troops and rebels and the local governor said an accord signed last month had done nothing to improve the security situation.

The agreement was intended to improve bilateral relations between the two countries, which were cut off in 1994 as each government accused the other of supporting its opponents.

``Immediately after the agreement was signed, Eritrean government troops and the rebel SPLA (Sudan People's Liberation Army) started to attack some of our army border units,'' Governor Ibrahim Mahmoud Hamid told Reuters. Hamid said the attacks had been launched on an almost daily basis.

``On the third and fourth of this month, rebels supported by Eritrean troops launched a big attack on the areas of Togan and Tadai, but we were able to defeat this big army,'' Hamid said.

He said that although the situation was under control, the war had had a very negative impact on Kassala, a dusty state of about 1.2 million people and few resources, where illiteracy and disease are widespread.

The government, non-governmental organisations (NGOs) and some better-off citizens have been helping about 55,000 people displaced by the fighting, who have gathered in three camps in the northern and southern parts of Kassala.

The World Food Programme (WFP) is providing food to about 28,000 at Wad Sherifie, about 15 km (nine miles) from Kassala.

Glenda Jackson, the WFP representative in Kassala, said she was worried about the situation because of the looming rainy season. ``These people currently live in houses made of straw and leaves and these kinds of buildings would not stand any slight rains and we are very worried,'' Jackson told Reuters.

Sanitation was also a concern. ``There are not enough pit latrines and if it rains, I am afraid we could be faced with a major health problem,'' she said.

Landmines sown in the region were also a hazard for villagers and farmers, who travel to the town daily to sell their produce.

A doctor at Kassala Teaching Hospital said 154 landmine victims had been treated in the past five months. About a dozen people had died as a result of their wounds and many had lost limbs or eyes.

Hamid blamed the SPLA and their National Democratic Alliance (NDA) allies for the mines.

Kassala has also been hosting refugees fleeing fighting between Eritrean and Ethiopian forces. The governor said 300 Eritreans and 60 Ethiopians had arrived in the past few months, in addition to about 35,000 Eritrean refugees already in Kassala.

The state has just two factories, an onion processing plant in Kassala town and a sugar mill at New Halfa, both of which are seasonal and at least two of its five constituent provinces cannot support themselves.

The international organisation Plan Sudan is trying to help Kassala battle illiteracy and endemic diseases and is spending some 600 million Sudanese pounds ($240,000) every month to build and renovate schools, hospitals and roads.

Kenya's North Eastern Provincial Commissioner Maurice Makhanu said here Friday that Kenya and Ethiopia had achieved a mutual understanding to bring the refugees home in July and August, the state-run Kenya Times newspaper reported Saturday.

The ethnic Somalis fled Kenya to Ethiopia in the period between 1993 and 1994 because of tribal violence between ethnic Degodia and Ajjuran Somalis in North Eastern and Eastern provinces and parts of Coast province.

Makhanu led a Kenyan delegation of security and administrative officials to Ethiopia to discuss border security between the two countries from June 7 to 9.

Meanwhile, Kenya and Ethiopia also agreed to open five border crossing points on their international frontier to facilitate free trade between the two nations.