05:14 a.m. Jun 28, 1998 Eastern
By Matthew Bigg
ADDIS ABABA, June 28 (Reuters) - Diplomacy has taken centre stage in the conflict between Ethiopia and Eritrea in an effort to prevent two weeks of phoney war flaring again into bloody battles.
In an unexpected gesture, Eritrea on Saturday welcomed a resolution by the U.N. Security Council on the conflict.
``At least for the first time we feel that an attempt to ensure the concerns of both countries are being addressed,'' Eritrean presidential adviser Yermane Gebreab told reporters in Asmara. ``So we think that it is very positive.''
Ethiopia also welcomed the resolution, which appeared to reinforce a demand by the United States and Rwanda -- already backed by the Organisation of African Unity (OAU) -- that Eritrea withdraw to territory it occupied before the conflict began on May 6.
The United Nations and the OAU have now both issued resolutions that hark back to the U.S.-Rwanda initiative.
The Security Council resolution condemned the use of force by both sides and urged the Horn of Africa neighbours to call a ceasefire. It also endorsed the peace initiative of the OAU.
On June 9 OAU leaders appealed to both sides to ``put an end concurrently and simultaneously to all hostilities (and) accept and implement the recommendations of the facilitators (namely the United States and Rwanda).''
Eritrean President Isayas Afewerki rejected the U.S.-Rwanda plan because, he said, it singled out Eritrea to withdraw to territory it held before May 6.
Until the border dispute erupted into conflict last month, landlocked Ethiopia and the Red Sea state of Eritrea appeared to be firm friends.
With common policies on economic development, Eritrea and Ethiopia had drawn the support of Western governments which saw them as potential bastions of stability in a region still unsettled by wars in Sudan and Somalia.
Diplomats in the Ethiopian capital admit they were caught by surprise by the start of the conflict, despite warnings of a rumbling border dispute and by Ethiopia's response to Eritrea's introduction of its own currency last November.
``This conflict caught everybody by surprise,'' one senior Western diplomat told Reuters. ``Nobody realised that these issues (the border dispute and the currency issue) would have the potential to generate so much animosity.''
Asked why the conflict started the diplomat said: ``I think there has been a miscalculation on the part of Isayas (Afewerki), a total lack of realisation of what is going on in Ethiopia -- and that is very surprising.''
Eritrea made the first incursion into Ethiopian territory on May 6, following it up six days later, diplomats say. Soon afterwards the conflict spiralled into a ground and air war on fronts at Badme, Zalambessa, and south of Assab port.
Both Afewerki and Ethiopian Prime Minister Meles Zenwi have now agreed a moratorium on air strikes, but tension is still high.
Eritrea argues it was only reclaiming land at Badme that rightfully belonged to it after extreme provocation by Ethiopia.
Hundreds have died in the conflict and thousands have been displaced. Both sides have used a lull in the fighting since June 11 to mobilise reinforcements.
Diplomats estimate the two nations have the potential to draw on as many as 350,000 troops and militia to fight at short notice.
Few believe the lull will last indefinitely, since mediation has so far failed to resolve the underlying border issue and there are no new proposals to restart talks.
``Any nation would want to retake its territory. You don't need a licence to protect your sovereignty,'' Ethiopian government spokeswoman Selome Taddesse told Reuters on Saturday.
Eritrea gained independence from Ethiopia in 1993 in a referendum and became Africa's youngest state. Earlier, Eritrea had fought a 30-year guerrilla war, first against Ethiopian Emperor Haile Selassie and then against the Marxist regime which overthrew him in 1974.