NAIROBI, Jan 24 (Reuters) - Kenyan President Daniel arap Moi held lengthy discussions with Eritrean President Isayas Afewerki in Asmara on Sunday, Kenyan state radio reported.

The meeting was seen as a move to head off the threat of a renewal of the military confrontation which broke out between Eritrea and Ethiopia last year over a border dispute.

The radio said Moi, accompanied by Foreign Minister Bonaya Gadana, was received by Afewerki after flying from Nairobi ``to attend to matters beneficial to Africa.''

Western diplomats said they understood Moi would urge Eritrean President Isayas Afewerki to avoid a new confrontation with Ethiopia.

The Kenyan leader had held talks a day earlier with Ethiopian President Meles Zenawi. The meeting took place in Arusha in northern Tanzania, where Moi attended an East African meeting with the Tanzanian, Ugandan, Rwandan and Ethiopian presidents.

U.N. Security Council members expressed concern on Friday about a continuing military buildup along the Ethiopia-Eritrea border and the threat this posed for renewed hostilities.

The Council expressed its concern at the failure of recent mediation efforts and the concentration of troops along the 600 mile (960 km) frontier, which has raised fears of renewed fighting over contested border areas after a seven-month lull.

The Security Council reaffirmed its support for mediation efforts by the Organisation of African Unity (OAU) and urged both parties to cooperate fully.

U.S. President Bill Clinton also called on Ethiopia and Eritrea to accept the OAU peace plan, and urged both to exercise restraint.

Eritrea became Africa's newest independent state in 1993 when it broke away from Ethiopia, with Ethiopia's agreement. Relations between the two Horn of Africa states broke down last year with each accusing the other of violating their common border.

An uneasy peace was restored after fierce frontier fighting, but hostile relations continue and landlocked Ethiopia, unable to use Eritrea's Red Sea ports, Assab and Massawa, now moves its import and export trade through Djibouti.

Eritrea and Ethiopia, along with Kenya, Djibouti and Somalia, are members of the Inter-Governmental Association for Development (IGAD) which links countries in the Horn of Africa.