"A military build-up along the common border over the past few months has reached alarming proportions," the ICG says, citing statistics that each side has at least 100,000 troops available to fight along the 1,000-kilometre long frontier.

"To prevent this, the international community... must act immediately to give both sides the clearest possible message that no destabilising unilateral action will be tolerated," the group recommends.

The ICG report says the current crisis is a result of continuing differences over the contested border between the two countries – differences which sparked war in 1998. That war was brought to an end by an agreement in Algiers in 2000, which set up a boundary commission to demarcate the border.

The commission ruled that the disputed town which set off the war was in Eritrea, but Ethiopia has blocked demarcation. According to the ICG, although Eritrea "has right on its side… [it] has played its cards very badly," alienating many of its supporters.

The ICG says the stalemate between the two nations came to a head at a September 2007 meeting of the boundary commission: "The rapidly approaching danger point is the end of November, when the boundary commission indicates it will close down unless it is allowed to proceed to demarcation."

The group says Western intelligence analysts have warned that Ethiopia might back a coup attempt against President Isaias Afwerki of Eritrea, followed by an Ethiopian military intervention.

"The risks are perceived to be all the greater because there is much speculation the U.S. would accept, perhaps even endorse, such a move and protect Addis Abeba from international condemnation."

The ICG says the United States, as "the pre-eminent external influence on the Horn of Africa," should send tell both sides that the use of force is unacceptable. Moreover, it should tell Ethiopia - "where its influence is at this time stronger" – that it will take diplomatic and economic measures against the country if it attacks or tries to overthrow Eritrea's government.

The ICG recommends that the UN Security Council should pass a resolution "reiterating its support for the Boundary Commission decision, requesting it to remain in being beyond the end of November so that it is available to demarcate the border, and stating that even without such demarcation the border as found by the Commission is acknowledged as the legal boundary between the two countries."

"There will be no easy military solution if hostilities restart," says the ICG. "More likely is a protracted conflict on Eritrean soil, progressive destabilisation of Ethiopia and a dramatic humanitarian crisis…

"Ethiopia and Eritrea are both are ruled by narrow elites, which take all major decisions in secrecy. It is impossible to be precise, therefore, about how close to a new war they are but the signs are highly worrying and strongly suggest that one could erupt at any time, without further warning, as happened in 1998…"

The ICG declares in the conclusion of its report: "International indifference or mistaken confidence could cost the people of the Horn of Africa dearly, as well as destabilise an area stretching from Central Africa to the Gulf."

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