The once-close Horn of Africa neighbours have been locked in a bitter row over their 1000-km (625-mile) frontier since a 1998-2000 war that killed 70,000 people.

Last week, Ethiopia said it supported efforts by Libyan leader and new African Union chairman Muammar Gaddafi to arbitrate between Addis Ababa and Asmara, but doubted the manoeuvre would be successful.

"The political and diplomatic campaigns undertaken by (Ethiopia) ... are but wicked ploys designed to appease the Eritrean people and international community," state media quoted Isaias as saying.

"He further underlined that as long as sovereign Eritrean territories remain under occupation, engaging in dialogue about any issue is totally illogical," it said on the government website, www.shabait.com.

A 2002 border decision gave the flashpoint town of Badme to Eritrea, but Ethiopia initially rejected it. Addis Ababa has since said it wants more talks.

Eritrea is also involved in a border dispute with Djibouti. The two sides clashed last year and tensions have remained high.

In mid-January, the U.N. Security Council gave Eritrea five weeks to withdraw its forces from the Red Sea coastal area of Ras Doumeira and Doumeira Island. Asmara has rejected the call.