According to Eritrea, fighting in the year-long border war continued on Wednesday, with Ethiopian warplanes bombing grazing land in western Eritrea.

U.N. envoy Mohamed Sahnoun held talks with Meles in an attempt to mediate an end to the conflict, which first erupted last May. He arrived in Addis Ababa on Wednesday from Asmara, where he met Eritrean President Isayas Afewerki.

``As long as Ethiopian territory remains under Eritrean occupation, it is impossible to discuss a ceasefire and negotiate a resolution to the border conflict,'' Meles told Sahnoun, according to a government statement.

``The government of Eritrea needs to officially declare that it will withdraw its troops from all Ethiopian land and agree to set a short timeframe in which the withdrawal will be implemented,'' he said.

There was no immediate comment from Ethiopia on an Eritrean government statement which said two Antonov planes bombed nomadic grazing areas on Wednesday morning, killing cattle but no humans.

A new round of fighting broke out in early February, and tens of thousands are believed to have been killed in trench warfare along the 1,000 km (600 mile) border.

While both sides have nominally accepted a peace plan drawn up by the Organisation of African Unity (OAU), they have interpreted the plan differently.

Eritrea wants a ceasefire followed by formal demarcation of the border, but Ethiopia says Eritrea must withdraw it troops first to show its commitment to the peace plan.

But they gave no details of the meeting, which followed discussions between Sahnoun and Eritrean President Issaias Afeworki in Asmara on Monday.

The Algerian diplomat met Tuesday evening with Ethiopian Deputy Foreign Minister Tekeda Alemu and other officials, they added.

Ethiopia and Eritrea have been at intermittent war along their 1,000-kilometre (600-mile) - long border since May last year, with both sides saying thousands of troops have been killed.

In late February, Ethiopia drove Eritrean troops out of the Badme region on the western front after having cast their presence in that zone -- previously under Ethiopian administration -- as a symbol of Eritrean aggression.

Asmara subsequently accepted an OAU peace plan to which Addis Ababa had agreed when it was presented last November.

The plan calls for the deployment of peacekeepers and observers and neutral delineation of the ill-defined frontier, but its implementation remains blocked, and demands for a ceasefire by the UN Security Council have gone unheeded.

Addis Ababa interprets the plan as requiring Eritrea to withdraw from all disputed territory its troops occupied along the border last year, but Asmara maintains that it requires only a retreat from the Badme area -- already accomplished by force of arms -- before military disengagement by both sides.

Sahnoun's current mission -- he also shuttled between the two countries in February, but was unable to prevent the war reigniting -- is centred on "how to get through the current impasse," an African diplomat told AFP.

Shanoun was due to hold talks later Wednesday with Organisation of African Unity (OAU) Secretary General Salim Ahmed Salim.

African diplomats said an OAU team visited New York two weeks ago for discussions on deploying the proposed peacekeeping and observation force.

The United States on Monday renewed its call for an immediate ceasefire.

"We believe a ceasefire is the first priority and we do not support any preconditions for immediate ceasefire," State Department spokesman James Rubin said in Washington.

"We urge both countries to work with the OAU and the international community to find quickly a peaceful solution to this border dispute," Rubin said, stressing that Washington had never taken a position on the status of Badme and other disputed regions.