Four hundred and fifty Ethiopians sleep on the streets of the Eritrean capital, according to Wondimu Degafa, the only remaining Ethiopian diplomat in Eritrea.

A recent visit by AFP to the market district in Asmara outskirts where they are supposed to be staying turned up only a handful.

Eritrea will not let them go home, claimed Wondimu.

Not so, Eritrean foreign ministry official Tesfamariam Tekeste firmly retorted, showing a letter from the International Committee of the Red Cross (ICRC) as proof of Eritrea's intentions.

In March, Eritrea arranged for 2,000 Ethiopians to return to their home country with the ICRC acting as neutral intermediary.

But on March 25 the ICRC wrote, "the whole border area is considered by them (Ethiopia) to be a war zone and therefore security cannot be guaranteed."

War between the neighbouring states broke out in May 1998.

Without Ethiopia's assurances, the ICRC deemed the trip too "hazardous".

From ICRC headquarters in Geneva, Juan Martinez, spokesman for Africa, confirmed the letter, which he stressed was a "note verbal".

The fate of the 450 Ethiopians remains unclear as each side launches accusations and any move to settle their fate only adds fuel to the fire.

At the now almost vacant Ethiopian embassy in Asmara, five men tell tales of woe, but almost every aspect is contradicted by Eritrean or independent sources.

They say they were detained at a prison in Hawashat. Eritrea says there is no prison at Hawashat.

Tesfamariam said that during heavy fighting the government moved Ethiopians, along with Eritreans, from the border area to towns such as Hawashite.

The men complained they were hungry and only received a few pieces of bread from Ethiopians living in the area, but none appeared unnaturally thin.

They said they are frequently beaten and harassed by Eritreans in the neighborhood.

There are many Ethiopians living and working peacefully in Eritrea, but the fragile coexistence is easily destroyed, especially by the presence of international journalists.

"You shouldn't be writing about this, saying bad things about Eritrea," shouted one elderly woman, trying to block journalists from the market district where AFP first met the Ethiopians.

No official attempts were made to block access, however.

Street children half-heartedly threw rocks at the journalists, while a group of men began hitting one of the Ethiopians.

While Wondimu bemoaned the fate of his countrymen, he said Ethiopia can do nothing for them while they are in Eritrea.

"Our policy is that these people would be better off in Ethiopia," he firmly stated.

He added that Ethiopia would not arrange transport home. "Eritrea should take care of them," he said.

One of the men threatened to kill himself if he was not allowed to stay in the embassy, but Wondimu said he must send him away.

Of the total amount, 35 million dollars is being set aside to fund the country's food security programme, according to an agreement signed Thursday.

The remainder would be expended on various development projects, including eight million dollars for education.

In an official statement published Friday by the local media, Ethiopia charged that Eritrea's strategy of falsely accusing it "of aggressive acts or military preparations prior to initiating its own military offensive, is by now well established."

"What is far more troubling than the latest lies being disseminated by the Issaias (Eritrean President Issaias Afworki) regime, to which we are all too accustomed, is what these false accusations signal: namely, the Eritrean government is preparing to launch a new attack on Ethiopia and is trying to shift the blame to the Ethiopian government in advance," the statement said.

It added that "in its most recent ploy", Eritrea accused Ethiopia of ordering foreign nationals to leave the northern regional state of Tigray bordering Eritrea, claiming the authorities were preparing to launch a military offensive there.

"This accusation and earlier accusations that Ethiopian forces destroyed villages in Eritrea's Gash Barka Zone are patently false," the statement said.

It added that Ethiopia had not issued any evacuation order instructing foreigners to leave Tigray, and that "the truth can be independently verified by contacting any of the various foreigners who continue to live and work in Tigray."

Foreign Minister Brown Mpinganjira told reporters in Blantyre Eritrea has accepted Malawi's reasons over the deportation.

Malawi swiftly deported the 24 Eritreans who were arrested at the Lilongwe International Airport with fake visas.

Airport security grew suspicious of the Eritreans, who had arrived from Addis Abbaba, aboard Ethiopian Airlines.

During interrogation, the group claimed to be tourists but when Malawian officials told them their visas were fake they changed their story, saying they were asylum seekers and got the visas from the Malawi mission in Addis Ababa.

The Malawi embassy in Addis Ababa, however, denied having records of the issuance of the visas. The group was then detained in Lilongwe, pending deportation.

During a scuffle, as the group resisted deportation, police shot one of them dead. Asmara was furious with the incident and despatched their South Africa- based envoy, Ghebremedin Tekeste, to mediate on behalf of his nationals but Malawian officials refused to bulge.

Asmara complained to the OAU and demanded compensation for the deceased and seven others who were injured.

Mpinganjira said Malawi prepared a docket over the issue, including a post- morten of the dead man and despatched deputy foreign minister Mekki Mtewa and secretary for foreign affairs Ziddy Medi to the OAU headquarters in Addis Ababa in September.

"The Eritreans have accepted they did not conduct themselves properly when handling the issue and had misinformed us," the minister claimed.

He said the OAU demanded from the Malawi emissaries a blow by blow account of the incident and how the Eritreans handled the issue.

He added that officials from Eritrea accepted Malawi's explanation and decided to close the issue. He said since Eritrea and Ethiopia are at war, there was confusion surrounding the matter. Mpinganjira recalled that Malawi had hosted over a million refugees from Mozambique and continue to host refugees and asylum seekers from other troubled spots on the continent.

Coffee prices reversed from the previous day's drop to close higher as dry conditions in Brazil coffee regions continued to support the market. Soybean prices slipped as clear weekend weather is expected to allow farmers to nearly finish this year's harvest in the Midwest. Oil prices closed higher on forecasts for coming winter weather.

Gold ended a choppy week higher after the government's report on wholesale prices, but the precious metal's reaction was less extreme than that of the U.S. stock market.

The Dow Jones Industrial Average fell 266.9 points largely in reaction to the Labor Department's report that its producer price index jumped 1.1 percent in September, the biggest monthly rise since September 1990.

Traders said gold's reaction to the news of accelerating inflation was relatively weak because the metal has lost favor with investors since falling to a 20-year low earlier this year.

At New York's COMEX, gold for delivery in December ended $2.20 an ounce higher at $316.40.

Coffee prices at New York's Coffee Sugar and Cocoa Exchange closed higher after a quiet session supported by concern over dry conditions in Brazil, the world's top producer.

``I think people are still concerned about the weather in Brazil and they'd rather be a little bit long than short, so you've had a little bit of buying on that,'' a broker said.

Brazilian forecaster Somar said early Friday that the coffee belt was still in need of regular rains but should benefit from two cold fronts expected over the next week.

U.S.-based Weather Services Corp. said temperatures would remain hot during the next two or three days, with a chance of scattered showers and thunderstorms in northern Parana and western Sao Paulo Sunday and Monday.

``It appears to us that the flow of tropical moisture into the coffee belt from the Amazon will remain shut off during the next seven days,'' the private forecaster said.

Coffee for December delivery rose 1.30 cents to 108.40 cents a pound.