President Isayas Afewerki told crowds celebrating Eritrea's independence in the capital late Tuesday that Ethiopia -- which now occupies a large chunk of Eritrean territory -- planned to ''destroy'' the tiny Red Sea state.

``The situation is at its very worst...but the present situation is temporary, it will not stay like this,'' Isayas told thousands of invited guests in the main square in Asmara.

``Ethiopia invaded us and we will fight against this naked aggression more than ever before, and in the end we will win,'' he said.

Tens of thousands Eritreans had gathered on the streets of the capital which was decorated with flags and brightly- colored lamps.

Eritrea won its independence from Ethiopia exactly nine years ago after a 30-year guerrilla struggle which ended with the overthrow in 1991 of Ethiopia's Marxist regime led by dictator Mengistu Haile Mariam.

Eritrean guerrillas had fought alongside Ethiopian rebels who seized power from Mengistu, and relations between the two states were initially friendly. Eritrea was granted its formal independence after a referendum in 1993.

But the friendship turned sour over trade disputes and disagreements over a poorly demarcated border.

Isayas Says ``Heroes'' Are Dying

Ethiopia opened a huge military offensive against Eritrea on the central front Tuesday and said it was close to winning the war after recent victories in the west where the Ethiopian army pushed deep inside Eritrean territory.

Tens of thousands of soldiers are on the Zalambessa front and analysts said the ongoing offensive could decide who wins the war, and how quickly.

Ethiopia's Foreign Minister Seyoum Mesfin said the country's army divisions, backed by superior air power, had taken the Eritreans by surprise and quickly seized control.

``They have already shattered the defense lines of the enemy, they have overrun many of their trenches by flanking from the right and the left, finding gaps and penetrating deep in,'' he told reporters. ``The myth of the invincibility of the Eritrean army has been shattered.''

Isayas told the crowd that fierce fighting was still going on late Tuesday. ``At this very moment our heroes are dying,'' he said.

``The Ethiopians have not learnt from our past war when they invaded our complete country. They have to realize that no one here wants to live in someone else's country.''

Ethiopia has said it wants to destroy the Eritrean army but has no intention of annexing its former colony.

Up to half a million Eritreans are thought to have fled their homes due to the fighting, and at least 100,000 have crossed the border into Sudan.

Western governments are horrified at the resumption of hostilities with around eight million Ethiopians and nearly one million Eritreans already on the brink of famine.

Special envoys from the European Union and the Organization of African Unity are shuttling between Addis Ababa and Asmara in an attempt to bring the two sides back to the negotiating table.

Eritrea said it would attend a new round of talks without preconditions, while Ethiopia said it was also happy to reopen talks, but said it would fight on while negotiating.