Eritrean President Isaias Afwerki called border security zone, which his troops occupy, “meaningless”, and blamed U.S. for 5-year border stalemate in 24 May independence-day speech.

Tensions persist as accusations traded. Ethiopia said killed 23 Eritrean-backed rebels, captured 18, received surrender of 112. Kenya announced effort to begin intense diplomacy between rivals. Eritrea suspended membership in regional Inter-Governmental Authority on Development (IGAD) 21 April over Somalia policy rifts.

Asmara expelled head of UNMEE mine clearance team 20 March for “violations of Eritrean laws and regulations”. Increasing tension between Eritrea and international community, and Ethiopia’s fostering of relationship with U.S. in particular, further polarizing the 2 countries.

Ethiopian PM Zenawi called for border demarcation issue to be resolved through dialogue. Zenawi criticised UN Security Council for not taking measures when Eritrean troops crossed Temporary Security Zone in 2006.

UN Security Council unanimously adopted resolution 1741 extending UN peacekeeping force UNMEE’s mandate until 31 July 2007. Resolution stipulated “reconfiguration”, from 2,300 to 1,700 personnel; called on Ethiopia to accept Boundary Commission decision to demarcate border and Eritrea to remove troops from Temporary Security Zone.

In response to November rejection of boundary commission proposals and Eritrean “humiliating impediments” UNSG Annan outlined 4 proposals for UNMEE reduction to UNSC 15 December; Annan supports option of reducing peacekeepers to 1,700 personnel (from 2,300) but maintaining current posts while sides use boundary commission-endorsed 12 months to reach agreement on emplacement of boundary pillars. Conflict in Somalia exacerbated by Ethiopian troops acting in support of Transitional Federal Government and Eritrean supply of arms and training for Islamists (see Somalia).

Both sides continued to back opposing sides in Somalia, raising fear of full-scale proxy war. Meanwhile, both rejected mid-November proposal by independent boundary commission to demarcate border on maps but leave physical demarcation to two countries to complete within a year.

Tensions rose as Eritrea amassed reported 1,500 troops and 14 tanks in UN-monitored Temporary Security Zone, in what UN called “major breach” of 2000 peace agreement. Eritrea rejected UN Security Council call to withdraw, claiming right of troops to assist with food production and security. Risk of full-scale regional conflict involving Ethiopia and Eritrea increased: UN report cited estimates of 6,000-8,000 Ethiopian troops in Somalia supporting Transitional Federal Government, and 2,000 Eritrean soldiers supporting rival Union of Islamic Courts.

Tensions over disputed town of Badme continued as Eritrea expelled 5 UN security staff accused of espionage. UNMEE mandate extended by Security Council until 31 January 2007. 2 more senior Ethiopian army officers reportedly defected to join Oromo Liberation Front secessionist rebels, after similar August defections of officers and soldiers. Hundreds of Ethiopian troops sighted in Somali town of Baidoa in late September (see Somalia, below).

Former Ethiopian commander defected with several senior officers and 150 soldiers to join secessionist, Eritrea-backed OLF rebels; clashes killed 2.