In addition to the new prisoners, the ICRC is continuing regular visits to POWs and interned Eritrean civilians at Bilate camp to verify whether their living conditions are in keeping with the rules of international humanitarian law.

They said that despite official denials, Eritrea is trying to destabilise Ethiopia and draw its troops away from the border by sending Ethiopian rebels to infiltrate the east of the country from Somalia.

It is also sending huge quantities of arms, according to the sources, some for use by the rebels and some by Somali factions, as Ethiopia arms their rivals.

Ethiopian armoured columns have rolled across the border into Somalia in hot pursuit of rebels three times since the Ethiopia-Eritrea war began a year ago, with Somali militiamen involved in the subsequent clashes, according to reliable reports from the border region.

Some Ethiopian troops remain in the southern Somali Gedo region to combat Ethiopian Islamist guerrillas in the Al-Itihad Al-Islam movement, sources told AFP.

On April 29, the UN Security Council called on all UN members to comply with an arms embargo against Somalia imposed in 1992, a year after the overthrow of dictator Mohamed Siad Barre and the descent of the Horn of Africa nation into anarchy.

Rival militias have been fighting ever since, with all attempts to set up a central government ending in failure.

Arms from Eritrea have been arriving by air and sea since January in territory controlled by Mogadishu warlord Mohamed Hussein Aidid, some for Ethiopian rebels in the Oromo Liberation Front (OLF) and the Ogaden National Liberation Front (ONLF) and some for Aidid's own militiamen, the sources said.

Asmara denies the charges, but the arrival of a ship loaded with weapons from Eritrea and 350 Ethiopian rebel Oromo fighters on Tuesday in the southern port of Merca, controlled by Aidid, was confirmed by a western diplomat in Nairobi.

Witnesses in Merca, 100 kilometres (60 miles) south of Mogadishu, also confirmed the arrival of the guerrillas and the weapons, which they said included anti-aircraft guns, armoured personnel carriers, heavy artillery pieces, thousands of small arms and tonnes of ammunition.

One said the Ethiopian guerrillas were accompanied by about 11 Eritrean army officers.

On Friday, more of Aidid's gunmen went from Mogadishu to Merca to demand a share of the weapons for their subclans, but were turned back by the militiamen Aidid deployed there after the arrival of the ship, witnesses told AFP.

Ethiopia, for its part, has been supplying weapons to factions opposed to Aidid's since 1996 -- the Rahanwein Resistance Army, fighting in and around the south-central town of Baidoa, the United Somali Congress/Patriotic Movement in central Somalia, and the faction of Hussein Haji Bod in north Mogadishi, credible militia sources say.

A press statement issued Friday by Ali Haji Iiman, a senior member of Bod's north Mogadishu faction, accused Aidid of "inviting foreigners to fight in Somalia."

Aidid, for his part, faxed a statement to AFP in Nairobi denying the arrival of Eritrean weapons and Ethiopian guerrillas.

He said a ship owned by a Somali businessmen arrived on Tuesday in Merca with a cargo of food, which his militiamen unloaded.

Aidid declared that his faction "does not support or encourage any subversive activity against the Ethiopian government or any other neighbouring state."

A handful of expatriate relief workers, who had considered Merca "safe" for the past two years, abandoned it last week after threats of attacks, a humanitarian source said, adding that it appeared their presence there during the unloading of the ship would have been unwelcome.

Richard Pankhurst from the University of Addis Ababa said the cross was taken from one of the churches of Lalibela last year, but had turned up in Europe after a Belgian collector bought it, not knowing it was stolen.

Pankhurst said Ethiopia's ministry of culture agreed to buy the cross back and said it should be repatriated later this month. Ministry officials were unavailable for comment.

The churches of Lalibela, hewn out of solid rock in the 13th century by the Ethiopian emperor who gave his name to the town, have been designated as a world heritage site by UNESCO.

Project aid from the World Bank was not under immediate threat, but the International Monetary Fund (IMF) was rattled by the war, Sufian Ahmed told Reuters in an interview.

One year ago this week, Ethiopia and Eritrea went to war over a barren strip of disputed land along their common border. Thousands have been killed in the conflict which flared last May and June and restarted in February.

The war between two former allies has undermined stability in the impoverished Horn of Africa region already rocked by civil conflict in Sudan and Somalia.

Sufian spent two weeks of April in Washington for his country's economic medium term review by the World Bank and IMF.

He said the Bank was satisfied with work on its projects, but the IMF showed reservations about the war and would send a further mission to Ethiopia in June.

``Some donors are waiting to see the outcome (of the war). They are mainly bilateral. The EU usually follows the IMF and they are awaiting the outcome of the (June) review,'' he said.

``The World Bank is satisfied with our efforts so far but it has also talked of uncertainty posed by the conflict,'' he said.

The World Bank agreed four large loans totalling $669 million for Ethiopia and $101 million for its much smaller neighbour Eritrea in 1997/98, said Oey Astra Meesook, World Bank country director for the two states.

But no fresh loans were started this fiscal year because the Bank did not have sufficient time to prepare and the two countries were still absorbing previous donations.

It was not clear if there would be more loans in 1999/2000.

``Our position right now is that on the ongoing operations, we're continuing to implement and to disburse. We are hoping the conflict comes to an end,'' she said. ``If it doesn't, we could be running into problems with projects which are in preparation.''

Meesook said the World Bank had hoped to lend Ethiopia, one of its favourite African pupils, $150 million for a power distribution project but that was too ambitious for 1998/99.

She said both countries were adversely affected by the war but Eritrea was the bigger loser.

Ethiopia targets real gross domestic product (GDP) growth at 7.0 percent in the three years 1998-2001, with inflation contained at below 5.0 percent, according to IMF figures. But continued fighting could make reaching those targets harder.

Eritrea's GDP growth is forecast to fall by half to 4.0 percent this year.

Ethiopia's defence spending has doubled to three percent of GDP in the last year from an average 1.5 percent, Sufian said.

``A reliable source has confirmed that the forces of the Eritrean Peoples Front regime on Tuesday morning attacked, by intensive shelling, the area of Rasai in Northern Kassala,'' it said. It did not report any casualties.

Sudan's President Omar Hassan al-Bashir and Eritrean President Isayas Afewerki signed an accord in Qatar on Sunday which calls for diplomatic ties to be restored, non-interference in each other's internal affairs and for dispute resolution.

``The Eritrean attack comes when the ink used to write the Doha agreement...had not yet dried,'' the daily's source said.

There was no immediate Eritrean comment on the reported attack, described in the newspaper's report as an attempt by Eritrea to disrupt reconciliation efforts.

Eritrea has accused Sudan of supporting Moslem militants and broke off diplomatic ties in December, 1994. Sudan denied the charge and accused its eastern neighbour of backing rebels.

The officials and local businessmen said Eritrean officials and up to 700 Ethiopian rebels disembarked after dark on Tuesday at the southern Somali port of Merca, controlled by south Mogadishu faction leader Hussein Aideed.

The ship, chartered by Eritrea, also carried some 40 anti-aircraft guns, four armoured personnel carriers, 80 heavy machine guns, ammunition, thousands of AK-47 assault rifles and spare parts, Merca port official Abdullahi Ali told Reuters.

The government of Eritrean President Isayas Afewerki is apparently supporting Aideed in an extension of Asmara's year-long border conflict with Addis Ababa.

Ethiopia has security interests in neighbouring Somalia dating back to a war in 1977 when Mogadishu invaded Ethiopia to back a rebel movement. Addis Ababa still believes groups allied to Aideed are working to destabilise the border.

Businessmen in the port city of Kismayo contacted by VHF radio said that in the last ten days Ethiopia had supplied arms and ammunition in military planes to forces opposed to Aideed in that city.

Ethiopia had previously trucked arms to other anti-Aideed forces at the town of Belet Uen on the Ethiopian border, they said.

Somalia is fast becoming a sideshow to the Ethiopia-Eritrea war, compounding the problems of the Horn of Africa nation that, since 1991, has been without central government.

A spokesman for Aideed in Mogadishu declined to comment on the reports while a spokesman for Isayas said they were false.

``It's a total fabrication,'' said presidential spokesman Yermane Gebhremeskel. ``We have never supported one faction over another... There is no way we can give away any of these weapons.''

Ethiopian rebel Oromo fighters landed at Merca were sent to a camp in Aideed-controlled territory at Qoryoley district, 136 km (85 miles) south of Mogadishul, witnesses said.

Reports from Somalia say a ship carrying weapons and hundreds of soldiers has docked in the southern port of Merca.

The reports say the ship was unloaded during the night under guard of militiamen loyal to the faction leader Hussein Mohamed Aidid, who controls the port.

The ship is said to have been chartered by Eritrea and correspondents say the soldiers appear to be loyal to the Oromo Liberation front, which is trying to overthrow the government of neighbouring Ethiopia.

The correspondents say both sides in the conflict between Ethiopia and Eritrea have been arming factions opposed to the other side in an attempt to open new fronts in the war.

From the newsroom of the BBC World Service