A US embassy official said Mr Lake, a former US national security adviser, had discussed "differing interpretations" of an OAU ceasefire plan with Ethiopian Prime Minister Meles Zenawi and OAU officials in Addis Ababa.

He then left for Eritrea where he is expected to meet President Isaias Afwerki.

A special envoy from Algeria, which currently chairs the OAU, is also trying to bridge the differences between the two countries.

Earlier this year, both Ethiopia and Eritrea accepted the OAU plan in principle but have not been able to agree on the practicalities of its implementation.

Anthony Lake is trying where other mediators have so far failed

Mediation efforts have, so far, failed to bridge the gaps.

On Wednesday, Ethiopia issued a statement saying it would continue fighting because Eritrea was not serious about peace.

The statement came at the same time the UN Security Council expressed optimism about peace efforts and urged both governments to accept the plan.

The two Horn of Africa neighbours went to war on 6 May 1998, each accusing the other of invading.

Since then, Ethiopia has demanded a withdrawal from land it says Eritrea has invaded.

Eritrea argues that it has not invaded Ethiopian territory, but merely reclaimed land which was rightfully its own in terms of colonial border treaties.

Tens of thousands of soldiers and hundreds of civilians have died, and nearly half a million residents on both sides of the border have been driven from their homes.

Ceasefire plan

The framework agreement requires both sides to agree a ceasefire and begin redeploying troops immediately after the fighting stops.

Both would have to sign a formal ceasefire agreement first.

The conflict has displaced nearly half a million people

Eritrea would commit to withdrawing its forces from territory it occupied after 6 May 1998. Ethiopia would pull back its forces from positions taken after 7 February 1999.

Both would also have to accept OAU military observers, working with the UN, to supervise troop redeployment.

The ceasefire agreement was revised during the recent OAU summit in Algiers, where both sides came under diplomatic pressure to resolve their differences.