Ethiopia and Eritrea have moved more troops and tanks towards their common border, a United Nations official says.
More than 3,000 UN peacekeepers patrol the border
The UN has revised its assessment of the border situation between the two countries from "stable" to "tense".
Ethiopia has not withdrawn its troops from land awarded to Eritrea by an international demarcation commission.
The demarcation followed a border war in which 70,000 people died. Eritrea has recently restricted the operations of UN troops patrolling the border.
A source at the UN Mission in Ethiopia and Eritrea (Unmee) told journalists on Wednesday that both countries have moved more troops and tanks towards the border in the past two or three weeks.
Diplomats in Asmara are waiting to see the final version of the latest UN Security Council resolution, which will probably be finalised in about a week.
They will also be interested to see the reaction from both countries, especially Eritrea.
Previous resolutions have failed to put pressure on Ethiopia to implement the border demarcation agreement.
BBC Asmara correspondent Ed Harris says the result of such weak resolutions is usually disappointment among most diplomats in Eritrea, and fury from the Eritrean government.
Diplomats say neither side is necessarily intent on war, and Eritrean Presidential Adviser Yemane Ghebremeskel described the reports of military movements towards the border as "irresponsible".
But there are fears that the restrictions on peacekeepers could cause a small incident to escalate into something more serious.
Last month, Eritrea banned all UN peacekeeping helicopters from Eritrean airspace and placed restrictions on ground movements of UN peacekeepers too.
The UN can now monitor only 40% of the buffer zone between the two countries.
Eritrea became independent from Ethiopia in 1993, after Ethiopian and Eritrean rebel movements overthrew the Derg regime in Addis Ababa.