ADDIS ABABA, Oct 31 (AFP) - Sporadic shelling resumed over the past week along the border between Ethiopia and Eritrea, foreign observers said, as regional efforts to resolve the neighbours' dispute gained momentum.

Artillery was heard last week along several fronts in north and northwestern Ethiopia, officials told AFP.

The resumption of hostilities comes as the Organisation of African Unity (OAU) prepares for an early November meeting aimed at resolving the border dispute which broke out in May.

Details of casualties and damage from the shelling were not available.

Ethiopian authorities said during recent trips to Zimbabwe, Japan, Malaysia and South Korea that Addis Abeba was determined "to give peace a chance."

Current OAU Chairman and Burkinese President Blaise Compaore, together with presidents Hassan Gouled Aptidon of Djibouti and Robert Mugabe of Zimbabwe are due to reveal a peace plan in Ouagadougou next weekend.

The proposal aims to put an end to almost 175 days of tension marked by mass deportations by both sides and by the displacement of hundreds of thousnds of civilians.

The plan follows the OAU mandate to the three presidents to reconcile the differences between Addis Ababa and Asmara.

Ethiopia claims its territory has been invaded and wants Eritrean troops to pull out of these northern areas before entering into any negotiations.

For its part, Eritrea wants the frontier to be clearly delineated under international supervision and has long expressed willingness to talk directly to Addis Ababa.

In Ouagadougou in August, African heads of state and officials of the OAU's conflict prevention mechanism concluded that Badme, one of the disputed territories "was under Ethiopian administration before May 6."

The OAU's proposals are based on plans drawn up earlier by the United States and Rwanda. They call on both countries to accept the principle of a peaceful solution to their differences, to define the border that separates them through negotiation, and to agree to the demilitarisation of border areas.

The plan has been endorsed by the UN Security Council, the European Union, the association of African, Caribbean and Pacific countries (ACP) and the Arab League.

It also calls for the withdrawal of Eritrean troops from the town of Badme to where they were deployed before hostilites broke out on May 6 and foresees an investigation into those incidents.