The OAU announcement followed a week of mediation efforts by Algerian Premier Ahmed Ouyahia and U.S. envoy Anthony Lake, who said before leaving the region Saturday that the conflict's conclusion was in sight.

But Ethiopian government spokeswoman Selome Tadesse expressed skepticism about the OAU's report of progress. "The Eritrean government has repeatedly worked to thwart and impede the peace process in the past, and it cannot be expected to have suddenly had a change of heart and be sincerely committed to peace,'' she said in a statement.

The two Horn of Africa nations have been entrenched in a bloody war since May 1998 over disputed areas along their 620-mile border that has claimed tens of thousands of lives, mostly those of soldiers, and driven almost half a million people from their homes.

The OAU said Monday it had arranged to bring delegations from both nations to Algiers to work out the details of a framework peace agreement. The group did not say when the meeting would take place.

Both countries have signed the agreement and more recently have announced their acceptance of a paper intended to clarify differences of interpretation that had interfered with the accord's implementation.

The OAU said in a statement it had received confirmation from both sides of their acceptance of the ceasefire agreement.

But in response to the OAU statement, Ethiopia said it still doubted Eritrea's sincere commitment to peace. Both countries will send representatives to Algeria -- which currently holds the OAU chairmanship -- on Wednesday to work out the technical details of the ceasefire.

The OAU, in its statement, noted the ``clear disposition of Ethiopia and Eritrea to contribute to the speedy implementation of the Framework Agreement and the modalities.''

``In that regard the two parties indicated that they were looking forward to the OAU submitting to them the practical arrangements specifying the details of the implementation of the Framework Agreement and the modalities,'' the OAU said.

Eritrea says it sees no obstacles to a quick implementation of the OAU plan. But Ethiopian government spokeswoman Selome Taddesse said she believed Eritrea was still opposed to a peaceful resolution of the conflict.

``Given that the Eritrean government has repeatedly worked to thwart and impede the peace process in the past, it cannot be expected to have suddenly had a change of heart and be sincerely committed to peace,'' she said.

``Consequently, the Ethiopian government does not believe that Eritrea has any intention of implementing the proposal aimed at securing a real and lasting peace.''

``Based on conversations that I and the Organisation of African Unity (OAU) delegation had in the last few days, we made great progress,'' the statement quoted Lake as saying before he left the Ethiopian capital on Saturday.

``I believe that each country (Ethiopia and Eritrea) has now made a decision to achieve progress,'' he added. Lake and former Algerian prime minister Ahmed Ouyahia, the special envoy of the OAU, had been shuttling between Asmara and Addis Ababa in a bid to end the war between the two Horn of Africa neighbours, in which tens of thousands of troops are thought to have died.

Asmara radio reported on Sunday that Eritrean President Isayas Afewerki had pledged his support for a peace plan which both sides accepted in principle at an OAU summit in Algiers earlier this month. ``President Isayas on his part reassured the two envoys of Eritrea's full co-operation to the ongoing peace efforts,'' the radio reported.

Ethiopia has already said it accepts the OAU peace plan and would continue to seek a peaceful resolution ``provided the Eritrean regime fully accepts the peace proposal of the OAU.''

But it says it has doubts about Eritrea's commitment to the plan -- which calls for a ceasefire, the withdrawal of both countries' troops from territory taken since fighting began, and the return of civilian administration to war-hit areas.

Each country has accused the other of occupying territory along their 1,000-km (600-mile) border. In Addis Ababa, Lake said: ``There are a lot of details which have to be worked out. But a process is in place.''

Lake said his delegation had been working closely with the OAU for the last few months. According to the statement, Lake said both Ethiopia and Eritrea had said they wanted the United States to be involved in the peace effort.

``I have promised both governments that we will remain involved in the process in support of the OAU,'' he added.

The OAU delegation left Asmara on Saturday for Addis Ababa, the organisation's headquarters, and were later due to return to Asmara.

African diplomats in Asmara said on Sunday they were cautiously optimistic on prospects for bringing the two sides together for a peaceful resolution of the border dispute.

Eritrea was an Italian colony until World War Two and later became a province of Ethiopia. After a bitter guerrilla war which ended when the Marxist Ethiopian regime was overthrown in 1991, Eritrea became independent in 1993 with Ethiopian agreement.