Background:
Ethiopia is engaged in war to recapture its territory currently occupied by Eritrea. As Ethiopian Foreign Minister Seyoum Mesfin has stated,

"Our political and military objective is one and only one - to defend our sovereignty and territorial integrity and to regain our territory...."

Thus, despite Eritrea's allegations that Ethiopia has "territorial ambitions," it is Eritrea that not only desired to acquire Ethiopian territory but also has violated international law in pursuit of this goal. Ethiopia has no interest in gaining Eritrean territory, but it will accept nothing less than the restoration of its own sovereign territory.

``Eritrean forces are withdrawing to positions they are happy with,'' Eritrean presidential adviser Yermane Gebremeskel told Reuters. ``Those places which are vulnerable, we have to move.''

Eritrean troops had already retreated a few kilometers Friday after the Ethiopian breakthrough, but many decided to pull back again Saturday to stronger positions, Yermane said.

``It is much more important to have places which are strongly defendable rather than just holding territory,'' he said.

The Eritrean official added that fighting erupted again Saturday along the 60-km (40 mile) Badme front, but on a much smaller scale than on the previous four days.

The current bout of fighting began Tuesday with an Ethiopian ground offensive aimed at recapturing land occupied by Eritrean forces last May.

Both sides claim to have inflicted heavy casualties in terms of troops and military hardware in the latest clashes.

Friday, Ethiopian government spokeswoman Selome Taddesse said ``the heroic Ethiopian air and ground forces caused the Eritrean military major losses'' in an offensive the government has dubbed Operation Sunset.

Selome said in a statement the operation took its name from a quote from Eritrean President Isayas Afewerki, who reportedly said an Eritrean withdrawal from Badme was as unlikely as the sun never rising again.

But Eritrea's state-run news agency said late Friday the Ethiopian army had suffered such heavy casualties in the latest offensive that ``they will not be able to change the military balance.''

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

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

Eritrea gained independence from Ethiopia, with Ethiopian blessing, in May 1993 after a referendum. Relations began to sour over a currency dispute in 1997, highlighting a long-running disagreement over the border which boiled over into violence last May.

A string of foreign mediation efforts based on a peace plan drawn up by the Organization of African Unity (OAU) have failed to broker a peaceful solution to the conflict.

Details of the situation on the ground weren't clear. Eritrea conceded Friday that Ethiopia's troops -- which vastly outnumber its own -- had punched through a front line Friday at the Badme front.

Ethiopia and Eritrea are contesting parts of their barren, largely uninhabited, 620-mile border that were never clearly demarcated. Both sides have clashed in air and ground combat since Tuesday, and each has claimed to have inflicted heavy losses.

The latest fighting began Feb. 6 and ended an eight-month stalemate after full-scale war killed 1,000 people last May and June. Battlea have centered mainly on the Badme front, 600 miles north of Addis Ababa.

The fighting continues despite a Security Council resolution demanding an immediate cease-fire and a halt to arms sales to both countries.

The Organization of African Unity, stung by repeated setbacks in its efforts to end the war, was sending a delegation to Eritrea on Saturday.

On Friday, Ethiopia claimed ``significant victories'' and said its warplanes shot down a second Eritrean MiG-29 near Badme. Eritrean radio later conceded that Eritrea had lost ground to Ethiopian forces that punched through part of the 35-mile front, but called the setback temporary.

``The Ethiopian army was able today to penetrate through one position through repetitive assaults. This made Eritrea's fixed defense lines vulnerable, prompting Eritrean armed forces to withdraw and re-establish a new front line,'' the Eritrean News Agency said in a statement late Friday.

"Israel delivered updated versions of the sophisticated MiG aircraft to the Ethiopian air force," he said in remarks published Saturday in Egyptian government newspaper Al-Ahram.

Israel "has aligned itself with Ethiopia to encourage it to continue the fighting and ensure its air force's superiority," he said.

He said the development forced Asmara to obtain Mig 29 planes "as a deterrent and to stop the Ethiopian air strikes on Eritrean positions."

Israeli officials said in September that the sale of Israeli-upgraded MiG-21 fighter jets to Ethiopia required government approval and had been put on hold following Eritrean requests.

Ethiopian air strikes violate a US and OAU-sponsored moratorium signed with Eritrea June 14 on the use of aircraft.

Addis Ababa's violation of the moratorium "shows that the OAU is unable to ensure a relevant solution to the dispute," the Eritrean FM said.

It also demonstrates that the OAU should not "monopolize" mediation efforts and that the organization is "weak and in need of support," he said.

He appealed to the European Union to continue its mediation and said Eritrea was leaning towards a possible Egyptian initiative for resolving the conflict.

Eritrean radio acknowledged Friday afternoon that Ethiopian troops had "gained some terrain," but in the evening announced that Eritrean forces were counter-attacking, and making advances.

Journalists are barred from the front lines on both sides, but the Eritreans say the fighting is taking place across a 60-kilometre (35-mile) front on a vast, rocky plain which is heavily mined and surrounded by steep hills where artillery guns and tanks are dug in.

Eritrean military sources say the Ethiopians sent waves of infantrymen at the Eritrean positions, succeeding in breaking through the Eritrean lines at several points.

They captured several pockets of stony, unnamed terrain, Eritrean officials told AFP.

The battle, on the western Badme front of the 1,000-kilometre (600-mile) border, started on Tuesday, but the Eritrean government has issued no official communique since Wednesday, when it announced the destruction of 31 tanks that day, the capture of three more, and the shooting down of a helicopter gunship.

Both sides claim to have inflicted heavy losses on the enemy, but have given no figures in official communiques.

Pinned to the door of the Hollywood Stars bar in central Asmara on Saturday, however, was an Eritrean armed forces list of claims for the fighting on Wednesday.

It listed 3,697 Ethiopian soldiers killed, 4,270 wounded, and 115 taken prisoner.

It also announced the destruction of 18 tanks and the capture of one -- figures that differ from the official announcement -- plus the destruction or capture of seven anti-aircraft guns and an assortment of trucks, machine-guns, rifles and radios.

The list gave no Eritrean casualties.

Observers said the Eritrean armed forces would not have been in a position to ascertain the number of dead and wounded Ethiopian troops with such precision, but that the figures could have come from a radio intercept of Ethiopian communications -- the list at the Hollywood Stars notes the capture of 21 big field radios and three small ones.

The mood in Asmara remained sombre Saturday. Virtually everyone here has relatives or friends on the front line, and they are well aware of the nature of the fighting and the likelihood of high casualties on both sides.

The terrain favours defenders, who can rake attacking infantry with artillery, tanks and heavy machine-guns.

The announcement here of a counter-attack raised fears that casualties would mount on the Eritrean side, and the radio gave no details of the fighting early Saturday.

In Addis Ababa, an Ethiopian government communique claimed "even more significant victories" in Friday's fighting, and said the Ethiopian troops had inflicted "major losses" on the Eritreans. Government officials and diplomats in the Ethiopian capital said the Ethiopians had destroyed one of Eritrea's six MiG-29 interceptors on Friday, and crippled one on Thursday.

The fighting resumed on February 6 after the failure of diplomatic efforts to resolve the conflict, and Asmara declared on February 12 that it reserved the right to use its own air force if Ethiopia continued air strikes.

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 fighting between the two Horn of Africa neighbours is officially over some 2,000 square kilometres (770 square miles) of land along the 1,000-kilometre (600-mile) border, but observers say the root causes include Ethiopia's loss of its Red Sea ports as a result of Eritrea's independence in 1993, and political and economic differences.