Ethiopian PM Meles Zenawi has told the BBC that his country's border with Eritrea must be moved.
Badme was at the centre of the Ethiopia-Eritrea border dispute
He said that he accepted "in principle" the border ruling by an independent boundary commission but said "some adjustments" must be made.
When pressed by the BBC's Talking Point programme on whether the key town of Badme was in Eritrea, as the commission ruled, he refused to be drawn.
Tens of thousands of people were killed in a two-year border war in the 1990s.
A large United Nations peacekeeping force remains in a buffer zone along the disputed border.
In November, Mr Meles reversed his earlier rejection of the border ruling.
But when asked whether he now accepted Badme as part of Eritrea, he said:
"When it comes to implementation we feel that it is necessary that we make adjustments here and there with a view to coming up with a boundary that both sides can live with."
Further pressed on the issue, he said:
"It would be impossible for me to negotiate this issue in public on television, but the point is, there has to be some give and take, there has to be some adjustments on the basis of the boundary commission decision."
When asked to confirm that in his view it was still up for negotiations, that it was not finally resolved, he said: "Yes we have to address all of these issues together."
The disputed town of Badme was attributed to Eritrea in a 2002 ruling by the boundary commission set up under a peace treaty that both countries signed in Algiers in 2000.
After Mr Meles said that he now accepted the border ruling, there were protests in the Ethiopian capital, Addis Ababa.
The conflict started after Eritrean troops invaded Badme, which was under Ethiopian administration.