The Ethiopian government requested the operation, which will begin this month and be conducted through November, U.N. spokesman Fred Eckhard said.

The announcement came as the Security Council intensified efforts to bring the warring Horn of Africa neighbors together to start implementing an African-sponsored peace agreement both have said they would accept.

Diplomats said the council was planning to invite the head of the Organization of African Unity, Salim Ahmed Salim, to come to New York soon to discuss the next steps in implementing the OAU peace deal.

Eritrea and Ethiopia are fighting over parts of their barren 620-mile border that were never clearly demarcated when Eritrea became independent from Ethiopia in 1993. The latest fighting broke out Feb. 6 and ended an eight-month stalemate after full-scale war killed 1,000 people in May and June.

Ethiopia had agreed to the OAU proposal when it was presented in November, but Eritrea had balked at a clause demanding that it unilaterally withdraw its troops from disputed border areas before any cease-fire could be reached.

On Feb. 27, a day after Ethiopia broke through a key front at Badme, Eritrea announced it would accept the OAU agreement.

Ethiopia justified its continued military action in the region Wednesday, saying Eritrea's acceptance of the OAU plan was ``insincere and tactical'' and intended to buy time.

``There is now absolutely no doubt that what Eritrea wanted to do by accepting the OAU plan at the eleventh hour was to gain respite for further military preparation,'' the Ethiopian government said in a statement Wednesday.

But in Addis Ababa, a senior Ethiopian foreign ministry official told AFP that Eritrea must effect an "immediate and unconditional retreat from our territories" before peace talks could start.

Ethiopian troops pushed Eritrean forces out of the Badme region on the western front in heavy fighting at the end of February which left thousands dead, according to both sides.

Addis Ababa then demanded that Eritrean forces retreat from all other areas they occupied along the 1,000-kilometre (600-mile) border before implementation of an Organisation of African Unity (OAU) peace plan.

The blueprint envisages a ceasefire, demilitarisation of the border -- which implies a pull-back by both sides -- the deployment of peacekeepers and observers, and neutral demarcation of the frontier.

An Eritrean pullback would be "within the framework of demilitarisation of the entire common border," the Eritrean foreign ministry said in a statement, reiterating that Asmara was ready for "an immediate cessation of hostilities."

"Eritrean troops have, since 27 February 1999, been redeployed from Badme and its environs which are presently occupied by Ethiopia," it added.

"Eritrea is ready to implement redeployment in 'all other contested areas along the common border within the framework of demilitarisation of the entire common border' and accepts the supervision of the demilitarisation process by a group of military observers as provided for in ... the (OAU) framework agreement."

The statement also accused Addis Ababa of "feverishly preparing for a new aggression against Eritrea," charging that "Ethiopia has been consistent in its rejection of both a ceasefire and cessation of hostilities."

The Ethiopian official took issue with Eritrea's use of the phrase "contested areas," saying: "The Ethiopian territories occupied by the Eritrean army in the north and northeast of the country (Ethiopia) are not contested zones."

The key question, he said, was: "Are Eritrean troops currently occupying territories administered by Ethiopia before May 6, 1998," when the war first flared.

"If the response is 'yes,' and that is the case, then they must withdraw from these territories," the official said.

He added that there was "nothing new" in the Eritrean offer.

Addis Ababa accuses Eritrean troops of occupying the previously Ethiopian-administered regions of Zala Anbessa, Aiga, Alitena and Egala on the central front, and Badda-Burie on the eastern front.

The OAU plan calls for an Eritrean withdrawal from Badme and its environs -- accomplished now by force of arms -- but Addis Ababa says the OAU provided it with a clarification that "Badme and its environs" referred to all territory the Eritrean troops occupied in the initial five weeks of fighting last year.

Each side accuses the other of bad faith in interpreting the OAU agreement, but the organisation itself has made no public statement to clarify its position.

No fighting was reported along the border Thursday for the fourth day in succession.

Warplanes were taking off and landing throughout the day at Asmara's airport, but an official said they were carrying out routine surveillance missions.

Asmara dates the crisis back to July 1997, when it says that Ethiopian troops in hot pursuit of rebels ended up occupying the hamlet of Adi Murug, in southeastern Eritrea, and the publication in Ethiopia the same year of a map of the Tigray region which Asmara says includes Eritrean territory.

The two countries did not sign any treaty to mark the border when Eritrea became independent of Ethiopia in 1993. Eritrea bases its case on treaties and maps from the Italian colonial era.

The UN World Food Programme (WFP) meanwhile announced in Nairobi on Thursday that it had approved 24.3 million dollars to fund an emergency operation to feed some 272,000 Ethiopians who have been displaced by the war.

After being driven out of the disputed Badme region by Ethiopian forces in late February, Eritrea swiftly accepted a peace plan drawn up by the Organisation of African Unity (OAU) - which already had the backing of Ethiopia.

The international community breathed a sigh of relief, believing an end was finally in sight to the seemingly futile 10-month fracas over a small and worthless scrap of land which has cost thousands of lives on both sides.

But Ethiopia said it cannot trust its northern neighbour to keep its word and has brushed off calls from the United Nations and Eritrea for a ceasefire.

Hundreds of thousands of troops still face each other across the 1,000-km (600-mile) frontier, and with daily exchanges of poisonous propaganda still flowing, diplomats fear the tense stand-off could break any day.

They say Ethiopia is preparing a new offensive farther to the east at Zalambessa, one of three places along the border where Ethiopia claims Eritrea still occupies its territory.

``Ethiopia lost a lot of lives at Badme and it's not going to stop with the job half done,'' said a Western diplomat in Addis Ababa. ``If Eritrea doesn't put its money where its mouth is and pull its troops back we're going to see the same thing again at Zalambessa.''

The renewed wrangling is a huge blow to international mediators who appear unsure of what to do next.

Both sides now say they accept the OAU peace plan, which in theory should be a major breakthrough. But in practice there is little common ground, with each side choosing to interpret the 11-point plan in different ways.

Eritrea says that with its withdrawal from Badme it has fulfilled the main precondition of the plan before a ceasefire and negotiations on demarcation of the border can begin.

But Ethiopia says Eritrea's sudden embrace of the peace initiative is ``tactical and insincere'' and has demanded that Eritrean troops leave other parts of Ethiopian border territory.

``We suspect their honesty with regard to the OAU agreement,'' Teshome Toga, Ethiopia's ambassador to Kenya, told Reuters. ``They are just buying time to reinforce their positions.''

Eritrea argues that the OAU plan refers only to an Eritrean withdrawal from ``Badme and its environs'' and that Ethiopia has injected new conditions at the last minute, while it ``feverishly finalises preparations for a new offensive.''

``Now they are back-tracking because they have a hidden agenda,'' Eritrean Ambassador to Kenya, Ghirmai Ghebremariam, told Reuters. ``They don't want to stop at the border, they want to overthrow the Eritrean government.''

This allegation has been flatly denied by Ethiopia.

``We have no interest in the internal affairs of Eritrea and no ambition on an inch of Eritrean territory,'' Teshome said.

While the bitter polemics fly back and forth across the border, diplomats admit the mediation process is seriously floundering.

``When you have a situation of complete mistrust, even hatred, it gets increasingly difficult to steer a clear path,'' said one diplomat. ``But unless somebody comes in with a firm hand we're going to see things degenerate pretty quickly.''