UNITED NATIONS, Aug 14 (Reuters) - Security Council members generally endorsed on Monday proposals by Secretary-General Kofi Annan for a large U.N. peacekeeping force to monitor an accord halting a two-year-old border war between Ethiopia and Eritrea.

But in an initial debate on the proposals, they stressed that a ceasefire was not enough as the two impoverished Horn of Africa nations must forge a genuine peace and that the planned U.N. force could not remain indefinitely.

Council members, who referred to the dire humanitarian situation in the region, worsened by a serious drought, also witnessed an exchange of recriminations by representatives of Eritrea and Ethiopia.

"The search for better bilateral relations goes on forever; the presence of U.N. peacekeepers should not," Ambassador Nancy Soderberg of the United States told the council.

She was participating in the debate on a report by Annan recommending expanding a recently established 100-member U.N. Mission in Ethiopia and Eritrea (UNMEE) into a full-scale peacekeeping operation comprising up to 4,200 troops.

UNITED STATES DRAFTING RESOLUTION

The United States was drafting a resolution and looked forward to "the quick deployment of a full U.N. mission," Soderberg said. "Our fondest hope is that both governments will turn their attention to the genuine needs of their people: health, education, food security, jobs and housing."

Ethiopia and Eritrea signed an accord in Algiers on June 18, under the auspices of the Organisation of African Unity (OAU), to halt a conflict that has claimed tens of thousands of lives, uprooted more than a million people and at times involved World War One-type trench warfare. The accord is intended to lead to the demarcation of the disputed border.

Fighting which first broke out along the 600-mile (1,000 km) border in 1998 flared up again in May this year, with each side accusing the other of seizing disputed territory.

Britain's deputy U.N. representative, Stewart Eldon, said: "Particular care will be needed to define the time-scale of UNMEE's deployment. We agree fully with the secretary-general's concern that UNMEE's peacekeepers should not be expected to deploy indefinitely," he said.

He urged both sides to maintain the ceasefire and to continue to work for a negotiated, lasting peace agreement.

PROPAGANDA AND RECRIMINATIONS

Netherlands ambassador Peter van Walsum said one step toward restoring confidence between Ethiopia and Eritrea would be "to put an end to all mutual recriminations and other forms of propaganda, and to start treating each other's nationals in a more decent and humane fashion."

Eritrea's charge d'affaires, Tesfa Alem Seyoum, told the council it was meeting "at a time when a vast sovereign territory of the state of Eritrea has been invaded and occupied by neighbouring Ethiopia, with impunity, since last May."

Welcoming Annan's report recommending a full-fledged U.N. force, he said over a million of his countrymen were internally displaced and some 95,000 others had fled to Sudan "as a result of Ethiopia's invasion which was aimed at destroying the small nation of Eritrea and the dignity of its people."

Fesseha Tessema of Ethiopia, who also expressed satisfaction with the main elements of Annan's report, agreed with speakers who said the war should never have happened. But he added: "Our conscience is clear. Not only were we victims of blatant aggression but also our government and our people gave their best try to end it peacefully."

UNITED NATIONS (AP) -- The United States backed a 4,200-strong U.N. peacekeeping mission to monitor a cease-fire between Ethiopia and Eritrea Monday but warned that the troops must not be a substitute for a comprehensive peace agreement.

U.S. deputy ambassador Nancy Soderberg implored the Horn of Africa neighbors to mark the end of their two-year border war by starting a new relationship that would promote economic development and "the free flow of people, goods and ideas."

But her plea for compromise and an end to recriminations was ignored by the representatives of Eritrea and Ethiopia at an open Security Council meeting on Secretary-General Kofi Annan's proposal to bolster the U.N. force to 4,200.

Eritrea's U.N. representative Tesfa Alem Seyoum accused Ethiopia of continuing to occupy its territory, raping underage Eritrean girls and women as old as 60, abducting boys, stealing livestock, vandalizing businesses, and robbing "priceless holy treasures" from churches and mosques.

Ethiopia's U.N. envoy Fesseha Tessema blamed Eritrea for starting the war and and violating the June 18 cease-fire by deporting 10,000 women and children to Ethiopia "under inhumane and harsh conditions" two days later.

While the former allies kept up their war of words, they both supported speedy deployment of a 4,200-strong U.N. peacekeeping force including 220 military observers backed by three infantry battalions.

The U.N. troops would be deployed in a 15-mile buffer zone on the Eritrean side of the 620-mile contested border while independent experts conduct the demarcation of their border.

The beefed-up force would bolster a U.N. mission of 100 military observers approved by the council July 31, which is expected to start arriving this month, Undersecretary-General for Peacekeeping Bernard Miyet told the council.

The two-year border war ended after Ethiopia launched a sweeping offensive into Eritrean territory on May 12, forcing some 1 million Eritreans to flee at a time when a regional drought was threatening hundreds of thousands of lives. A cease-fire was declared on June 18.

More than 10 million people currently need food assistance and Miyet appealed to the international community for $87.3 million to fund humanitarian aid programs.

Annan's recommendation for a 4,200-strong force won wide support among Security Council members.

Soderberg said Washington is drafting a resolution to implement Annan's proposal, an announcement welcomed by other council diplomats.

Many Security Council members stressed that the U.N. force must not become a permanent fixture.

UNITED NATIONS, Aug 14 (AFP) - The United States urged Ethiopia and Eritrea on Monday to avoid the fate of warring states separated by barbed-wire frontiers patrolled by UN peacekeepers.

Nancy Soderberg, a senior member of the US mission to the United Nations, said the two countries "must develop a sophisticated bilateral relationship based on interdependence and a common agenda for prosperity."

She was speaking during a public session of the Security Council, which has been asked by UN Secretary General Kofi Annan to authorise a force of 4,200 troops to monitor a ceasefire between Ethiopia and Eritrea.

Annan said the force would include 585 soldiers to clear landmines along the disputed border, where war broke out in May 1998 and flared again in May this year after a lull of about 10 months.

"We urge the governments of Ethiopia and Eritrea to aspire to more than the tragic experiences that produced decades-old lines across the Korean peninsula, the Middle East and the island of Cyprus," Soderberg said.

The main tasks of the force recommended by Annan would be to monitor the ceasefire agreement brokered by the Organisation of African Unity (OAU) and signed in Algiers on June 18.

The force would verify the redeployment of Ethiopian forces and monitor the positions of Eritrean troops beyond a buffer zone 25 kilometres (15.5 miles) wide.

Soderberg recalled that the Algiers agreement "makes explicit the commitment of the parties to determine their common border, including through the use of an arbitration mechanism if a quick agreement cannot otherwise be reached."

The two countries should forge a relationship "based on the free flow of people, goods and ideas," she said.

Referring to "the economic dynamo that is today's European Union," she recalled that "the original impetus for the EU was the realization on the part of Germany and France that economic integration was the key to preventing forever the return to war."

Speaking on behalf of the UE, the French representative, Yves Doutriaux, welcomed Annan's proposals as "a sound basis on which to initiate a peace settlement."

He urged the two sides to resume proximity talks which they began in Washington last month. The Security Council is expected to vote on Annan's recommendations later this month.

On July 31, it unanimously passed a resolution approving a force of up to 100 military observers for an initial period of six months.

Doutriaux said the EU "supports the deployment of international observers, and is also ready to help with delimiting and marking the border, with mine clearance and with efforts to help refugees and displaced persons."