The Eritrean capital exploded with joy at the end of a tense day Wednesday when state radio announced Eritrean forces had shot down an Ethiopian MI-24 helicopter gunship, destroyed 31 tanks, and captured three.

People danced in the streets for a solid hour, horns blared, soldiers shot their rifles in the air, and hordes of young children ran through the streets waving paper flags.

Many people in Asmara listened to the radio all day, on the second day of what the government described as "very intense" fighting along a 60-kilometre (35-mile) stretch of the Gamharo plain on the western Badme front of the border war between the two Horn of Africa neighbours.

With only 3.5 million people in Eritrea, virtually all have family or friends in the 230,000-strong army, and the mood during the day was anxious, with no indication of which army had the upper hand. The radio is the Eritreans' main source of information, but those with short-wave radios can pick up international stations which include the Ethiopian communiques in their reports.

Many people, too, have friends in Ethiopia, and correspond with them by e-mail, although access to the Internet is blocked here. The mood changed dramatically as soon as the radio made its announcement at 5:00 p.m., with one young man shouting to an AFP reporter: "We're happy."

At 7:00 p.m., an announcer went on the air to ask the soldiers to stop their victory shooting -- those shots in the air have to come down somewhere -- and motorists to halt their honking.

But the mood remained animated, and grinning people crowded the streets.

The Eritreans have given no casualty figures for either side, however, and authorities blocked journalists from going to the front. No journalists are known to be at the front on the Ethiopian side either, which means the press is unable to verify the competing claims in the war of communiques.

In Asmara, officials told foreign journalists the fighting was still going on for the third day, but the blackout on Eritrean radio was total, with no communiques.

In Addis Ababa, Ethiopian government spokeswoman Salome Tadesse also confirmed the fighting was continuing, but she too gave no details.

One indication that the fighting was probably intense was the fact that foreign journalists remained blocked in Asmara -- Eritrean officials had told them they would be allowed to go the front as soon as a lull came in the fighting.

On Wednesday, Eritrean radio claimed that in two days of fighting in the Badme region of the western front, Eritrean forces had destroyed 40 Ethiopian tanks, captured five, and shot down an MI-24 helicopter gunship.

That announcement -- dismissed by Tadesse as "a complete lie" -- brought an explosion of joy in Asmara, with people dancing in the streets, car horns blaring, soldiers shooting their rifles in the air, and hordes of young children running through the streets waving paper flags.

Each side claims to have inflicted heavy casualties on the other, but neither has given any figures.

The Badme region has been occupied by Eritrean troops since hostilities over the ill-defined border erupted last May, and has become a symbol to the Ethiopians of Eritrean invasion. Each side accuses the other of being the aggressor.

The clashes which began Tuesday are pitting infantry units, tanks and artillery guns face-to-face on a vast, heavily mined plain surrounded by mountains. Addis Ababa has acknowledged its air force is in action there despite a US-brokered moratorium on airstrikes the two sides signed last June as the initial round of fighting petered out.

Fighting resumed on February 6 after the failure of diplomatic efforts to resolve the dispute.

Ethiopia said in a communique on Wednesday: "If Eritrea would withdraw from Ethiopia's territory, not only would airstrikes be unnecessary, but all fighting would cease to be necessary.

"Ethiopia is only using air power because it has been forced to defend its territory from invasion," the communique said.

The Organisation of African Unity (OAU) has meanwhile decided to send a three-man team to Asmara to seek its responses to clarifications of an 11-point OAU peace plan provided at Eritrea's request.

An OAU team made up of the ambassadors of Burkina Faso, Zimbabwe and Djibouti which was to have visited Asmara earlier this week aborted its mission after Eritrea refused to accept the Djibouti delegate.

The two Red Sea neighbours broke diplomatic relations last November after Eritrea accused Djibouti of allowing Ethiopian troops to use its territory.

The peace plan, which has been endorsed by the international community, is meanwhile stalled on a clause requiring Eritrea to withdraw from the Badme region ahead of neutral demarcation of the border.

The new team comprises a top aide to OAU Secretary General Salim Ahmed Salim, the OAU's political director and the head of the pan-African body's conflict resolution panel.

Djibouti on Wednesday denied that any Ethiopian troops were present in Djibouti, or that Ethiopian and Djibouti soldiers were conducting joint patrols on their shared border.

``Fighting is continuing on the (Badme) front. The situation is still serious,'' a senior Eritrean government official told Reuters.

Both sides have claimed the upper hand in fighting which began on Tuesday with an Ethiopian ground offensive aimed at recapturing land occupied by Eritrean troops last May.

Eritrea said on Wednesday it shot down an attack helicopter, destroyed 31 Ethiopian tanks and captured three in two days of fighting.

Ethiopia denied the claims and said that its forces, backed by air power, had inflicted heavy casualties and had destroyed Eritrean military equipment.

After an eight-month lull, the border war reignited at Badme on February 6 and spread to two other fronts -- at Tsorona, south of the Eritrean capital Asmara, and Burre, southwest of the Red Sea port of Assab.

Apart some skirmishes at Tsorona on Tuesday, the other fronts have been largely quiet this week.

Eritrea gained independence from Ethiopia, with Ethiopian blessing, in May 1993 after a referendum.