DJIBOUTI, Nov 18 (Reuters) - Djibouti severed diplomatic ties with Eritrea on Wednesday after Eritrea accused it of supporting Ethiopia's war effort.

A statement by Djibouti's foreign ministry said its mission in the Eritrean capital, Asmara, was closed and the ambassador Ahmed Issa Gabode had been recalled along with his staff.

The statement demanded Eritrea recall its ambassador to Djibouti, Ramadan Osman Mohammed, and said it would serve him with notice of the diplomatic rupture this evening.

Djibouti... ``demands that the ministry of foreign affairs of the state of Eritrea close down its embassy in Djibouti and recall its diplomatic personnel,'' the statement said.

The government ... ``informs the authorities in Asmara that the embassy of Yemen in Asmara shall serve the interests of the Republic of Djibouti and those of its nationals,'' it said.

The row centres on alleged Djiboutian support for Ethiopia's armed conflict with Eritrea. Hundreds died in May and June in the conflict, which has since cooled although both sides continue to reinforce border positions.

Earlier this month Eritrea accused Djibouti of letting Ethiopia use its port as a conduit for military equipment to use in the conflict.

The accusation touched a raw nerve, in part because Djiboutian President Hassan Gouled Aptidon is one of three leaders trying to mediate between the two sides under the auspices of the Organisation of African Unity.

Djibouti's decision to sever diplomatic ties stems from: ``serious and baseless accusations levelled by the President of the state of Eritrea against our country,'' the statement said.

Most of Ethiopia's imports and exports have been channelled through the port of Djibouti since the conflict began with Eritrea. In the past, the landlocked Horn of Africa country used the Eritrean ports of Assab and Massawa.

(Additional reporting by Alexander Last in Asmara)