``Mubarak and Afewerki discussed Eritrean demands...and initiatives to solve the conflict between Eritrea and Ethiopia,'' Foreign Minister Amr Moussa told reporters.

Moussa said Egypt wanted to prevent an escalation in the border conflict between the two Horn of Africa nations which has killed thousands since it erupted in May and June last year and flared up again in February.

Ethiopia said its air force bombed and damaged Eritrea's naval base and oil depots near the Red Sea port of Massawa early on Sunday morning.

Sunday's attack was the first on Massawa since the border war erupted. It followed an Ethiopian announcement on Saturday that its planes had bombed Eritrean frontline positions along the Zalambessa front, on the disputed border.

Ethiopian Prime Minister Meles Zenawi was expected to arrive in Cairo with-in days, Moussa said, but he added any talks between Zenawi and Afewerki would depend on their consent to meet.

The meeting, which took place in the Mediterranean coastal town of Sirte, came just a day after talks between Kadhafi and Eritrean President Issaias Afeworki.

Issaias joined the Libyan leader in a mini-summit of African leaders also attended by Burkinabe President Blaise Compaore, the current chairman of the Organization of African Unity which has seeking to mediate an end to the bloody border war in the Horn of Africa.

The Eritrean president held talks with President Hosni Mubarak in Cairo Sunday after leaving Libya the previous evening on the eve of Meles's arrival.

Egyptian Foreign Minister Amr Mussa said Meles was also expected in Cairo in the next few days and that Egypt could arrange a face-to-face meeting with Issaias.

Eritrea and Ethiopia accepted in principle an OAU peace plan which calls for reestablishing Ethiopian government control in the disputed Badme area, demilitarizing the zone and deploying a peacekeeping force for six months.

But Addis Ababa is still demanding an official statement from the Asmara government stipulating a withdrawal of its troops from "all Ethiopian territory" as well as a pullout timetable ahead of any ceasefire.

Sudan's opposition National Democratic Alliance (NDA) has been in the country's embassy in Asmara since Eritrea broke off diplomatic ties with Sudan in December 1994 and handed the embassy over to the NDA.

Al-Rai al-Aam said the order was issued on Friday but did not say whether the NDA had complied. The newspaper said this was an important step in ``ending the state of enmity between Eritrea and Sudan and the return of relations to what they were in the past.''

Sudanese President Omar Hassan al-Bashir and his Eritrean counterpart Isayas Afewerki signed an agreement in Doha earlier this month to restore ties and resolve disputes after a four-year rift, in which Eritrea has accused Sudan of supporting anti-Eritrean Moslem militants.

Al-Rai al-Aam said the return of the Sudanese embassy was part of the Doha agreement. Sudan has denied supporting anti-Eritrean militants. In its turn it has accused Eritrea of backing the NDA

through training and by giving military, political, moral and media support to the opposition.

Al-Rai al-Aam said the order for the NDA to leave the embassy came after a high-level Sudanese technical team arrived in Asmara for talks with Eritrean officials last week.

The daily said the visit was the first of its kind since diplomatic ties were cut.

It said discussions focused on recent attacks on military posts in Sudan's northeast city of Kassala and an attempt to cut off the Khartoum-Port Sudan highway. Sudan says the opposition launched the attacks with the support of the Eritrean army but Eritrea denies the accusation.

``No, no, no,'' Afewerki said when asked about a Sunday report in independent Sudanese newspaper al-Rai al-Aam, which said an order had been issued to evict the Sudanese opposition National Democratic Alliance (NDA) from Sudan's embassy in Asmara in an attempt to improve relations between the two nations.

The NDA has been in the embassy in the Eritrean capital Asmara since Eritrea handed the building over after breaking off diplomatic ties with Sudan in December 1994.

Afewerki was speaking at a news conference in Cairo after holding talks with Egyptian President Hosni Mubarak on ways to end conflict in Africa, including Eritrea's war with Ethiopia. He said Eritrea was nonetheless looking for ``practical and realistic ways of resuming diplomatic ties'' with Sudan.

Asked how this would affect the Sudanese opposition in Asmara, he said: ``That has no relation at all. The Sudanese opposition problem is an internal Sudan problem. We are not a party to have a say on how this issue is resolved.''

Sudanese President Omar Hassan al-Bashir and Afewerki signed an agreement in Doha earlier this month to restore ties and resolve disputes after the four-year rift, in which Eritrea has accused Sudan of supporting anti-Eritrean Moslem militants.

Sudan has denied supporting the militants and has accused Eritrea of backing the NDA through training and by giving military, political, moral and media support to the opposition.

A Sudanese delegation recently visited Eritrea and al-Rai al-Aam said talks focused on recent attacks on military posts in the northeast Sudanese city of Kassala and an attempt to cut off the Khartoum-Port Sudan highway.

Sudan says the opposition launched the attacks with the support of the Eritrean army but Eritrea denies the accusation.

Afewerki said of the visit: ``We had to prove...that we are not having any military activity from Eritrean territory.''