On the third day of heavy fighting the late afternoon brought a full-scale battle.

Columns of smoke rose on the barren hillsides, Ethiopian guns pounded Eritrean-held positions and circles of fires burnt where the shells had landed. The criss-crossing valleys reverberated the sharp sound of outgoing fire from the Eritrean big guns.

An Ethiopian helicopter gunship appeared over the far hills into the wide sky. The fire from its guns shattered into the mountain sides.

Only after the light began to fail did the intensity of the fighting lessen. Badme is a harsh, remote triangle of land which has turned seemingly good neighbours into bitter enemies.

The fear is that the border fighting which began three days ago will spread and mark the start of a much longer war.

Eritrean forces moved into Badme last May, saying that they were taking back land which belonged to Eritrea.

Ethiopia says the land belongs to it. Neither side wants to back down.

Ethiopian officials, meanwhile, admitted that jet fighters were being used to support a counteroffensive. Eritrea condemned the violation of a moratorium on airstrikes that was brokered last June by President Clinton.

Fighting over the weekend ended an eight-month stalemate in the war between the two Horn of Africa nations. Disagreement over their unmarked border has simmered since Eritrea gained independence from Ethiopia in 1993.

Both countries have accused the other of setting off the latest round of fighting along the 600-mile border.

Eritrean spokesman Yemane Gebremeskel said fighting around Tserona, 60 miles south of the Eritrean capital of Asmara, lasted most of the day after Ethiopia attacked there for the first time Monday.

"Large parts of (Ethiopia's) 20th and 24th divisions -- which are supposed to be their elite fighters -- have been severely battered," he told The Associated Press.

The two sides also fought for a third day at two other fronts, including Badme-Shiraro, the origin of the border dispute. The village of Badme, 95 miles southwest of Asmara, burned Monday under fierce shelling and Ethiopian machine-gun fire.

An Ethiopian helicopter gunship fired on Eritrean positions Monday in the arid, dusty mountains.

The bodies of several Ethiopian soldiers lay strewn about the battlefield.

At least one dead Eritrean soldier lay in a trench. The wounded, limping and bandaged, were carried off by trucks after dark, when the shelling subsided.

On the outskirts of Asmara, officials also showed reporters about 100 Ethiopian prisoners captured on the Badme-Shiraro front, where the fighting first broke out on Saturday.

The Ethiopian POWs, speaking in front of their captors, said their commanders forced them to march overnight Friday and attack Eritrean positions early Saturday morning.

The Ethiopians said they were overwhelmed and after eight hours of battle were ordered to retreat. Instead they surrendered.

At the United Nations, spokesman Fred Eckhard said U.N. envoy Mohamed Sahnoun was flying to New York on Monday to brief the secretary-general and the Security Council on his peace mission.

The Organization of African Unity urged both countries to end fighting immediately Monday and recommit themselves to a peaceful solution to the crisis.

Reuters correspondents on two military fronts saw intense artillery exchanges throughout Monday but said the Eritreans were in high spirits and were holding their positions.

Eritrea appeared in control at the disputed border post of Gazagerehlase, which Ethiopia says it seized over the weekend.

An Ethiopian helicopter gunship fired rockets at Eritrean positions and a MiG fighter jet and an Antonov transport plane were also supporting Ethiopian troops.

But the bodies of several Ethiopian soldiers were lying close to Eritrean trenches, apparently cut down during an assault. Over 100 more had been taken prisoner, while Eritrean troops were well dug in and in good humour.

On another front about 160 km (100 miles) to the east, the Eritrean town of Tsorona was battered by artillery fire and residents said Ethiopian planes had dropped two bombs on Monday.

``Everything's burnt, everything's burnt,'' said one old woman as she looked around her, unflinching as the town echoed with shell blasts.

Most of the town's residents had evacuated before the border conflict erupted into heavy fighting on Saturday, but the old woman said she was going to stay put.

Plumes of white smoke rose from the ridges of Eritrean and Ethiopian positions outside the town and the earth was scorched where shells had landed. Haystacks were on fire and buildings inside Tsorona were pockmarked with shrapnel.

Ethiopia launched a two-pronged offensive on Monday morning and insisted it had made gains on the Tsorona front, seizing posts at Konin and Konito and inflicting heavy casualties.

But Eritrean officers in Tsorona said they were holding firm and that Ethiopian units had failed to advance. ``No, absolutely not. They have not come any closer. We stopped the advance,'' Lieutenant Teklem Hari told Reuters.

Army units continued to trade heavy artillery fire into Monday night. The Reuters reporters were with Eritrean forces on both fronts and were only able to observe fighting in those specific locations.

Ethiopia has so far not allowed journalists to visit battle zones along the 1,000-km (600-mile) border but officials disputed the validity of witness testimony in Gazagerehlase.

``It is totally untrue that the Eritreans hold Gazagerehlase,'' government spokeswoman Selome Taddesse told Reuters in Addis Ababa. ``The truth will come out in the end.''

The long-running border dispute boiled over into a brief land and air war last May but fighting petered out the following month and both sides agreed to a U.S.-brokered moratorium on air strikes.

Ethiopia said Eritrea was the first to break the moratorium with an attack on its northern town of Adigrat last Friday.

Numerous diplomatic attempts to broker an end to the dispute have failed. The United Nations, European Union and African regional leaders have all called for an end to the fighting.

Each side accused the other of firing first near Tsorona, a small Eritrean town which lies on a heavily-militarised plain between two mountain ranges and controls access to the strategic Eritrean town of Dekamhare, close to the capital Asmara.

Ethiopia said it had deployed fighter aircraft to attack Eritrean positions outside Tsorona and on the Badme front further west, the first time either side has admitted using air power in three days of fierce fighting between the former allies.

Government spokeswoman Selome Taddesse said its offensive on both fronts was in response to Eritrean attacks. ``The Ethiopian Defence Forces are engaged in a counter offensive at the Badme and Tsorona fronts,'' she told Reuters. ``This counter-offensive is supported by fighter planes.''

In Asmara, Eritrean officials said their army had killed hundreds of Ethiopian soldiers since fighting erupted on Saturday and was holding its ground on Monday.

``They are trying to attack our trenches (at Tsorona) with tanks, artillery and their troops,'' senior Eritrean government official Zemeret Yohannes told Reuters. ``They have not reached our trenches, they have not entered the plain.''

The new clashes broaden fighting that resumed on Saturday in the disputed region of Badme after an eight-month lull. They also appear to violate a U.S.-brokered moratorium on the use of air raids agreed last June.

Eritrean officials said Tsorona was the focus of fighting on the new front but that there were also clashes around the towns of Zalambessa and Alitena to the east.

In a further sign of an escalation of hostilities between the former allies, Ethiopia and Eritrea accused each other of shelling civilians on Sunday afternoon. On Monday, Eritrea's government said Ethiopia had shelled the southern Eritrean border town of Adiquala on Sunday, killing eight civilians and slightly injuring many others.

Ethiopia admitted attacking Adiquala with heavy artillery, claiming to have demolished an Eritrean radar station in an unpopulated area five km (three miles) outside the town.

It also accused Eritrea on Sunday of shelling its northern town of Adigrat, seriously injuring seven civilians. Selome said Adigrat had been shelled on Sunday afternoon, as Eritrea responded to battlefield losses around Badme.

INTRO: FIGHTING BETWEEN ERITREA AND ETHIOPIA IS IN ITS THIRD DAY WITH HEAVY EXCHANGES ALONG THEIR BORDER. DIANNA CAHN IN ERITREA'S CAPITAL, ASMARA, REPORTS ETHIIOPIA ADMITTED THE USE OF FIGHTER PLANES IN ITS LATEST ATTACKS VIOLATED A MORATORIUM ON AIR STRIKES IMPOSED IN JUNE.

TEXT: AUTHORITIES IN ERITREA SAY ETHIOPIA KILLED EIGHT CIVILIANS AND SEVERELY WOUNDED NINE OTHERS (LATE SUNDAY) WHEN IT SHELLED THE ERITREAN BORDER TOWN OF ADI QUALA, 80 KILOMETERS SOUTH OF ASMARA.

ETHIOPIA'S GOVERNMENT SPOKESWOMAN, SELOME TADDESSE, SAYS ETHIOPIA SHELLED ADI QUALA IN AN EFFORT TO TAKE OUT A GOVERNMENT RADAR INSTALLATION, AND WAS NOT TARGETING CIVILIANS.

AN ERITREAN FOREIGN MINISTRY SPOKESMAN, MOGES NAIZGY, SAYS ETHIOPIA ALSO HAS SHELLED THE BORDER TOWN OF ALITENA, 80 KILOMETERS EAST OF ADI QUALA.

IN HIS WORDS, IT IS VERY INTENSE AND GETTING WORSE, WITH FIGHTING CONTINUING IN THOSE TWO LOCATIONS, AS WELL AS ON THE BADME-SHERARO FRONT WHERE HOSTILITIES ERUPTED SATURDAY AND AGAIN ON SUNDAY.

ERITREA SAYS ITS FORCES KILLED 250 ETHIOPIAN TROOPS AND TOOK ANOTHER 18 PRISONERS IN SUNDAY'S BATTLES.

BOTH SIDES ARE TRADING ACCUSATIONS OVER WHO RESTARTED THE FIGHTING AFTER RELATIVE CALM SINCE BATTLES OVER BORDER REGIONS FIRST ERUPTED LAST MAY AND JUNE, KILLING AT LEAST ONE-THOUSAND PEOPLE.

THE GOVERNMENT HERE SAYS ETHIOPIA STRUCK FIRST SATURDAY AND SUFFERED HEAVY LOSSES BECAUSE ERITREA'S SOLDIERS REMAINED ENTRENCHED IN THEIR DEFENSIVE POSITIONS, WHILE THE ETHIOPIAN TROOPS EXPOSED THEMSELVES WHEN THEY LAUNCHED THEIR OFFENSIVE.

ETHIOPIA ACCUSES ERITREA OF TWICE SHELLING THE NORTHERN ETHIOPIAN TOWN OF ADIGRAT DURING THE WEEKEND, A CHARGE ERITREA DENIES. ETHIOPIA BLAMES ERITREA FOR INSTIGATING THE FIGHTING AND CLAIMS ERITREAN TROOPS TOOK HEAVY CASUALTIES SATURDAY WHEN EIGHT MONTHS OF RELATIVE CALM EXPLODED IN BATTLE.

SINCE JUNE, BOTH SIDES MASSED TROOPS ALONG THE COMMON BORDER, AND THE AIR FORCES OF BOTH COUNTRIES HAVE SPENT THE PAST EIGHT MONTHS BUILDING UP THEIR FLEETS WITH MORE SOPHISTICATED FIGHTER PLANES. (SIGNED)

Eritrean presidential advisor Yermane Gebremeskel said Ethiopian army units attacked in a heavily fortified mountain region southeast of the Eritrean capital Asmara on a third day of fierce fighting.

``They have opened a new front including Alitena, Zalambessa and Tsorona,'' Yermane said, adding fighting was continuing around the contested border region of Badme further west.

``The difference is they are using helicopters and fighter aircraft on both fronts,'' he told Reuters.

The new clashes broaden fighting that resumed Saturday near the disputed region of Badme after an eight-month lull.

The fighting has erupted around Zalambessa and Badme, both areas claimed by the two sides that saw heavy clashes last May and June which left hundreds dead.

There was no independent confirmation of the reports of a second front, nor immediate comment from Ethiopia.

But in a further sign of an escalation of hostilities between the former allies, Ethiopia and Eritrea accused each other of shelling civilians Sunday afternoon.

Monday, Eritrea's government said Ethiopia had shelled the southern Eritrean border town of Adiquala Sunday, killing eight civilians and slightly injuring many others.

Ethiopia also accused Eritrea Sunday of shelling its northern town of Adigrat, wounding seven civilians.

Adiquala lies around 80 km (50 miles) due south of Asmara and over 100 km east of Badme.

``There is no military presence in Adiquala, no garrison -- it is only a town,'' Yermane said. ``There is no meaningful purpose to shell the town other than to kill civilians.''

Ethiopian government spokeswoman Selome Taddesse said Adigrat had been shelled Sunday afternoon, as Eritrea responded to battlefield losses around Badme.

Eritrea also claims to have the upper hand, saying it killed 250 Ethiopian soldiers Sunday and captured 18 prisoners.

Eritrea won peaceful independence from Ethiopia after a referendum in 1993, but the two sides came to blows last May in a dispute over their 1000-km (600-mile) border.

Ethiopia said Eritrea first bombed Adigrat Friday and followed the air raid with a ground attack Saturday morning in Badme, which lies about 160 km to the west. But Eritrea said Ethiopia had fabricated the Adigrat raid as a pretext to launch its own invasion.

On February 7 at 5:45 p.m., Ethiopian forces using heavy artillery demolished an Eritrean radar station in an unpopulated area 5 kilometers southeast of Adi Quala.

Personnel supervising the station sustained casualties. Fighting continues at the Badme-Shiraro front.