The television showed pictures of Ethiopian troops walking in the town of Shembako, about 30 km inside Eritrea, where scores of fresh bodies and debris from destroyed buildings could be seen.

Trenches and fortifications, reportedly overrun during Sunday's fierce fighting by Ethiopian tanks and troops of hilly terrain near Shembako, were also shown on television.

Dead bodies were outside of the trenches, indicating that the enemy troops were killed as they tried to retreat.

Scores of more dead soldiers were visible at the entrances and inside several of the heavily fortified trenches that were destroyed by the Ethiopian troops.

Deep marks left by heavy artillery and tank shell were clearly noticeable on the side of the rugged terrain on which the trenches had been dug.

On the footage, two destroyed tanks were also seen near the fortifications.

It showed several hundred captured Eritrean troops as they were being moved to the rear, carrying on stretchers about a dozen of their wounded comrades.

Viewers saw piles upon piles of captured light weapons on the footage.

The commentator said what was being shown was about "the victorious" entry Sunday into Shembako by Ethiopian forces and their engagement with the enemy as they advanced "deep" into Eritrean territory.

Sunday was the third day of the renewed fighting that started Friday between Ethiopia and Eritrea in their two- year-old border conflict.

Meanwhile, Ethiopia said Monday night that its forces were pursuing enemy troops after additional Eritrean trenches and fortifications were overran.

A statement from the office of the government spokesperson said Eritrean forces that were trying to regroup earlier Monday were forced to retreat toward Das, Darentu and Maidima.

"As a result of heavy attacks launched by the valiant Ethiopian defence forces, Eritrean troops sustained significant human and material losses," the statement claimed.

It, however, said an Ethiopian fighter helicopter that was shot down Monday by Eritrean forces "landed in Ethiopian-controlled territory."

The statement added that all Ethiopian air force planes that took part in Monday's battle returned to base safely after "successful completion of the mission."

In the Ethiopian capital, Addis Ababa, the government spokeswoman blasted a draft U.S. resolution aimed at ending the latest fighting in the two-year border conflict here. The resolution introduced in the U.N. Security Council Monday would impose an arms embargo on both countries and travel restrictions on senior Ethiopian officials if the fighting doesn't stop immediately.

Selome Taddessee called the U.S. resolution ``unfair, biased and unjust'' and said it was designed ``to punish the victim of aggression and to lend support to the aggressor. If the Security Council accepts the resolution, she said, it will send the wrong signal to the volatile Horn of Africa region - that ``the law of the jungle pays.''

She welcomed as ``constructive'' a Russian resolution calling for continued diplomacy to revive the stalled peace process.

Fighting first broke out on the contested 620-mile border in 1998 when Eritrea seized a border post. In a terse statement today, the official Eritrean News Agency said Eritrea's defense forces were reporting heavy losses.

Ethiopia said its forces continued to make gains on the western Badme front of the border. Foreign journalists escorted to the front today heard shelling but did not witness actual fighting.

Operations Commander Ataklti Berhe said the Ethiopians routed large numbers of Eritrean troops in a surprise attack May 12-13.

``We surprised them on two flanks, surrounded them from behind and pushed up through the center. Because they were surprised, they fled in disarray, they just ran away,'' he said, surveying the bleak landscape dotted by empty soft drink crates and occasional scrubby trees.

The officer said eight Eritrean divisions of 5,500 troops each had been defending the position, dug in trenches cut out of the barren hillsides. He said 25,000 Eritreans were either killed, wounded or captured in the two-day assault. The others fled west toward Berentu, about 80 miles from the border with Sudan.

Zerai Testai, a 27-year-old former teacher, was one of 471 prisoners captured by Ethiopian forces.

``They used heavy artillery, aircraft, tanks and mortars and so many soldiers,'' Zerai said, his hands shaking. ``I do not want to fight again, we need a peaceful solution to the problem.''

In New York, Nancy Soderberg, Deputy U.S. Ambassador to the United Nations, said Monday that Eritrea had sent a letter to the Security Council accepting its May 12 resolution that the fighting stop immediately or both countries would face sanctions. A statement from Selome's office said Ethiopia ``remains open to resolving the conflict by peaceful means, as long as Eritrea is willing to negotiate without precondition.''

Ethiopia claims Eritrea is placing ``preconditions'' on implementation of an Organization of African Unity peace plan by insisting on a cease-fire first. Analysts say that by launching the latest attack, Ethiopian Prime Minister Meles Zenawi appears determined to gain the upper hand in setting conditions for peace with his former comrade-in-arms, Isaias Afwerki, who is now president of Eritrea.

Officials said Ethiopian troops swept across several lines of Eritrean trenches, seizing important areas and inflicting heavy losses on enemy forces. Eritrea responded by saying Ethiopian forces had suffered their heaviest losses to date, describing the scene on the Mereb-Setit front as a ``massacre'' site.

``The victory that Ethiopia is boasting about is proving illusory,'' the foreign ministry said in a statement issued on Tuesday.

At the United Nations, the Security Council prepared on Tuesday to consider a U.S. resolution that would ban arms sales to the two belligerents, more than nine million of whose people are on the brink of starvation because of a regional drought.

Diplomats said the Council was divided and they did not expect any vote before Wednesday.

At the Ethiopian military command post of Heret, just short of the border, reporters heard artillery exchanges from a vast rocky plain inside Eritrean territory Tuesday morning.

Ethiopian troops deployed in the region said they had made important advances since the latest round of fighting began with a heavy land and air offensive last Friday.

``Our soldiers are doing very well. They have advanced very far,'' an Ethiopian soldier said at a military base near the town of Inda Selassie, well inside Ethiopia. ``But the fighting is heavy, very heavy.''

Eritrea Says It Downed Two Aircraft

Ethiopian government spokeswoman Selome Taddesse admitted one Mi-24 helicopter gunship had been downed, but denied an SU-27 fighter had also been shot down.

More than 200,000 Ethiopians marched through Addis Ababa in support of the war against Eritrea Monday, denouncing the United States and Britain for meddling in Ethiopia's internal affairs.

Both countries insist they want a peaceful settlement but each blames the other for a series of failed peace initiatives since the war began in May 1998.

Tens of thousands of soldiers are thought to have been killed in World War One-style trench warfare since the conflict began over a border dispute and trade issues.

Reporters saw 470 Eritrean prisoners of war Tuesday who corroborated the Ethiopian version of events on the Mereb-Setit front.

``There was very heavy shelling and we were trapped so I stayed in one spot and I was later captured. I have seen a lot of dead soldiers,'' said Zerai Tesfai, 27, one of the prisoners.

Fighting is now centered around the town of Berentu and the Ethiopian military flew journalists over long lines of deep trenches that snaked across the barren and inhospitable border region, which until a few days ago was home to tens of thousands of soldiers, but now showed little sign of life.

No agreement was reached on Monday, with the council far from united. Further consultations were scheduled for Tuesday but several diplomats do not expect any vote before Wednesday.

The proposed U.S. resolution would ban sales or delivery of all types of military equipment to either combatant.

It would also prohibit senior Ethiopian officials from travel abroad, a provision several council diplomats believe will be struck from the final draft.

Eritrea has written to the Security Council president, Wang Yingfan of China, accepting council demands to stop fighting. Its foreign minister, Haile Woldensae, said his country accepted ``an immediate cease-fire and the unconditional resumption of peace talks.''

British Ambassador Sir Jeremy Greenstock said the council wanted a similar response from Ethiopia, which began the latest round of fighting on Friday two days after seven Security Council ambassadors visited both countries to urge a resumption of peace talks that had broken down.

But Nancy Soderberg, the U.S. ambassador who introduced the draft resolution, said an arms embargo should be imposed regardless of whether immediate fighting stopped because ``we hope to degrade their ability to carry on this war.''

``Obviously they have enough arms to fight for now but we hope over time it would have an impact,'' Soderberg said.

Council Threatens Action

The new measure, however, is an uphill battle, with Soderberg saying there was ``a wide divergence of views.''

Russia, who at one time sold weapons to both sides, submitted a separate resolution that would send envoys back to the region but exclude an arms embargo.

Wang said Beijing in general opposed sanctions but that it was considering the draft resolution. And France was prepared to vote for the arms ban provided it included a time limit, diplomats said after Monday's council consultations.

Tensions between the two neighbors over border claims and economic policy exploded into war in May 1998 and tens of thousands have been killed in World War I-style trench warfare. Ethiopia and Eritrea both insist they want a peaceful settlement but each blames the other for a series of failed peace initiatives since the conflict began.

Fighting erupted again on Friday after a year-long lull, a week after the breakdown of peace talks held in Algiers under the auspices of the Organization of African Unity.

On Monday more than 200,000 Ethiopians marched through the capital, Addis Ababa, in support of the war. They threw stones at the U.S. and British embassies for suggesting the arms ban.

Eritrea said it downed two Ethiopian aircraft and inflicted heavy casualties in intense fighting on the western front. Ethiopia conceded one of its helicopters had been shot down but denied a fighter plane had also been downed.

Eritrea had wanted both sides to sign a cease-fire before sitting down to thrash out the finer points of a peace accord. Ethiopia wants a peace pact completed before a cease-fire, saying Eritrea had launched the original invasion.

Once close allies, Eritrea gained independence from Ethiopia in 1993, following the overthrow of former Marxist military dictator Haile Mengistu Mariam.