Battle for border town

Heavy fighting is raging between Ethiopian and Eritrean troops for control of a key town on the central front as the two year border war enters a potentially decisive phase.

An Eritrean statement said fighting was continuing on Wednesday, the anniversary of its independence, after an offensive on Zalambessa, about 100 km south of the Eritrean capital, Asmara, was repulsed on Tuesday.

The statement said Ethiopia had suffered "the biggest losses in a day since it resumed its war of aggression almost two weeks ago".

But Ethiopia announced on Tuesday that its rapidly advancing forces had shattered Eritrean defences and captured some strategic locations.

Ethiopia invaded us and we will fight against this naked aggression more than ever before, and in the end we will win

Eritrean President Isaias Afwerki

There are no independent reports from the front line around Zalambessa - a previously Ethiopian town captured by Eritrea in 1998 - where both sides have amassed tens of thousands of soldiers.

Independence

Addressing a crowd of thousands in Asmara to commemorate the 1993 independence from Ethiopia, Eritrean President Isaias Afwerki admitted that Eritrea had suffered heavy losses in Ethiopia's 12-day offensive.

Eritrean troops leave Asmara for the front line

In his first public appearance since the offensive began, Mr Isaias accused the international community of staying silent in the face of Ethiopia's invasion of a sovereign state.

Shortly before the president made his speech, Eritrea announced that it had shot down three Ethiopian fighter planes.

But Ethiopian government spokeswoman Salome Tadesse denied losing any planes, retorting that the Eritreans must be dreaming.

Up to half a million Eritreans are thought to have fled their homes because of the fighting, and at least 100,000 are reported to have crossed the border into Sudan.

Final push

Ethiopian forces are occupying several Eritrean towns in the west of the country in their push to try to force an end to the border war that has cost thousands of lives.

Ethiopian Prime Minister Meles Zenawi has confidently predicted the war could be over within days after the rapid military advances on Zalambessa.

Eritreans have been praying for peace

Western military sources say most of Ethiopia's weaponry has been reserved for this offensive.

Some observers estimate that Ethiopia has more than 100,000 troops around Zalambessa, while Eritrea has up to 80,000, thought to be the largest portion of the Eritrean army still intact after Ethiopia's advance.

Ethiopia has said that the objectives of its offensive are to dismantle the Eritrean army and recapture territory it says its Horn of Africa neighbour occupies.

If it takes Zalambessa, it will have gone a long way to achieving both goals.

Diplomatic doom

Special envoys from the European Union and Organisation of African Unity (OAU) have spent two days in shuttle diplomacy aimed at brokering a ceasefire.

But Algerian Justice Minister Ahmed Ouyahia, envoy for the OAU, said he was disappointed in his discussions with Ethiopian and Eritrean officials.

"I did not find any will for peace on either side," he said.