I would worry that Ethiopia’s contested government (accused of election rigging, as the related articles linked above show) might see renewed war with Eritrea as a tactic for clinging to power, deflecting the public’s anger onto a foreign enemy. PINR has been following this buildup, here are some recent reports from them.

On Eritrea:

“Eritrea’s independence left its border with Ethiopia undemarcated, creating a point of tension between the two countries that broke into open hostilities in 1998; when Ethiopian soldiers entered the disputed Badme region, Asmara responded by invading the region with a substantial force and Addis Ababa followed by declaring “total war.” Ethiopia won a substantial victory in May 2000 when it conducted a successful offensive that led to its occupation of 25 percent of Eritrea’s territory. Addis Ababa then halted the war and Asmara accepted a peace pact, including independent border demarcation.

“When the E.E.B.C. awarded Badme to Eritrea, Addis Ababa refused to accept the result, although it had agreed to honor the Commission’s conclusions, opening up a period of stalemate marked by increasing impatience in Asmara and leading, finally, to its recent threat to renew the war.

“With a population of more than 60 million to Eritrea’s 4.5 million, Ethiopia has clear advantages in its dispute with its rival. Most importantly, it is what area expert Michela Wrong calls a “linchpin nation” in north-central Africa, with strategic significance for outside great powers, particularly the U.S., which is actively seeking stability and support in the region as it executes its strategy of suppressing Islamic revolution by gaining the cooperation of friendly governments. .. Aware of its edge, Addis Ababa has been confident that it can wait out Asmara and retain control of Badme. Ethiopian Prime Minister Meles Zenawi, who leads an increasingly authoritarian regime, would face serious internal threats to his rule if he made concessions to Asmara.

“Washington, its E.U. allies and other great powers have been placed in an uncomfortable dilemma by Asmara’s assertive strategy. If they fail to place more effective pressure on Addis Ababa, they will set a destabilizing precedent for other conflicts throughout Africa and court the risk that Asmara will play its military card. If they do try to sway Addis Ababa, they risk alienating a “linchpin nation” and destabilizing its regime.”

From this report, Eritrea seems like the party most likely to initiate a conflict, provoked by Ethiopia’s unwillingness to accept the border agreement.

What’s going on in Ethiopia?

“During the week of October 10, Ethiopia — the dominant power center in the Horn of Africa — moved closer to a political crisis with the seating of a new parliament elected in a May 2005 vote .. Defying pressures from the U.S. and E.U., .. the largest opposition block, the four-party Coalition for Unity and Democracy (C.U.D.), .. boycotted the parliament, refusing to take its seats.

“The C.U.D. believes that the removal of immunity and Zenawi’s rhetoric portend a severe crackdown on the noncompliant opposition going beyond the temporary arrests and harassment of opposition leaders and supporters to which the government has resorted since the May elections. Zenawi fears that the C.U.D. intends to foment a “Green Revolution” in Ethiopia along the lines of Georgia’s Rose Revolution, Ukraine’s Orange Revolution and Kyrgyzstan’s Tulip Revolution. Although each side denies that its adversary’s suspicions are well founded, both have reasonable grounds to take their fears seriously.”

“The strategic interests of Ethiopia’s donor powers would have been served best had the opposition acquiesced in the electoral results and had Zenawi shown signs that he would move democratization forward. Since neither requisite for stability has been met, Washington and Brussels are left with a dilemma. If they back either side, they drive the other into opposition to them. Yet if they do not enter the fray, they risk chronic instability in a country that is essential to their strategic purposes in the region. For the moment, the Washington-Brussels partnership is reduced to calling for dialogue between the adversaries.” – Dr. Michael A. Weinstein, PINR

Related excerpts from PINR’s Intel Brief: Djibouti

“Djibouti has permitted the U.S. to open a base housing the headquarters of the Central Command for the Horn of Africa, which is tasked with anti-terrorism operations and fulfilling a program of regional stabilization through civil-affairs missions and military cooperation with local states.

“Bordered by Ethiopia on the south and east, Eritrea to the north, Somalia on the southeast and the Red Sea to the northeast, Djibouti is a small country in the Horn of Africa, with a population of 721,000 people according to U.N. estimates, that has vital strategic importance for the Western powers and its large neighbor Ethiopia.

“Geopolitically, Djibouti controls the passageway between the Suez Canal and the Indian Ocean, giving it prime importance for outside powers keen to protect their commercial interests. .. According to a U.S. State Department Consular Information Sheet on Djibouti, issued on May 2, 2005 — after the one-man presidential election — the country “enjoys a stable political climate.” That judgment, reflecting Washington’s vital interest in keeping its base, masks a situation in which Guelleh has succeeded in creating an authoritarian regime with formal trappings of democracy that is based on a political machine that controls the communications media, depends on Issa solidarity and has been able to co-opt enough of the Afar political class to overwhelm the opposition.”

update:

http://news.bbc.co.uk/2/hi/africa/4433468.stm

Ethiopia has been strengthening its military defences along the border with Eritrea, amid fears of a new conflict with its neighbour.

update:

http://news.bbc.co.uk/2/hi/africa/4505994.stm

Eritrea to expel UN peacekeepers

Eritrea is expelling Canadian, Russian, European and United States peacekeepers from the United Nations mission monitoring the border with Ethiopia.

http://news.bbc.co.uk/2/hi/africa/4508694.stm

UN demands halt to Eritrea order

The United Nations Security Council has told Eritrea not to expel European and North American peacekeepers from its disputed border with Ethiopia.

Update:

http://news.bbc.co.uk/2/hi/africa/4516754.stm

Ethiopia ‘to reduce’ border force

Ethiopia will move soldiers away from its border with Eritrea in compliance with a UN order aimed at averting fresh conflict, an Ethiopian official said.

news on the side (or maybe not…):

http://allafrica.com/stories/200512090167.html

Ethiopia, Belgium Sign Debt Cancellation Accords

The governments of Ethiopia and Belgium yesterday signed a 14.62 million euros debt cancellation agreement at the Ministry of Finance and Economic Development.

update:

UN warning on Horn of Africa war

A top UN official has warned that war between Ethiopia and Eritrea remains a possibility – five years after a deal ended their last conflict.

update:

UN pulls out Eritrea peacekeepers

The UN Security Council has decided to pull US, Canadian and European staff serving in the peacekeeping mission in Eritrea out of the country.

Note: I missed a couple of updates because of my finals

Update 12/21/05:

Eritrea broke law in border war

Eritrea triggered the border war with Ethiopia when it attacked its neighbour in May 1998, an international commission in the Hague has ruled.
Since there was no armed attack against Eritrea, its attack on Ethiopia could not be justified as lawful self-defence under the United Nations charter.

Eritrea is now liable to compensate Ethiopia for damages caused, it said.

Tensions over the border have risen in recent months with both countries sending more troops there.

...

update:

Protest at UN arrests in Eritrea

The United Nations has protested to Eritrea over the arrest of 13 local staff members employed to monitor the disputed border with Ethiopia.

Another 30 staff are in hiding, in fear of being detained as well.

...

http://szamko.gnn.tv/blogs/12941/Hunger_and_thirst_under_American_eyes_in_East_Africa

update:

UN Commander of Ethiopia-Eritrea Force Voices Hope for Peace Process Breakthrough

With the situation between the formerly warring countries of Ethiopia and Eritrea still deadlocked, the top United Nations force commander in the region has voiced hope for a breakthrough in the peace process.

Addressing a meeting of the Military Coordination Commission in Nairobi, Kenya, on Saturday, Major General Rajender Singh, who heads the peacekeeping troops serving with the UN Mission in Ethiopia and Eritrea (UNMEE), said the international community is working to forge a lasting solution to settle the conflict.

After Ethiopia and Eritrea signed a peace accord ending their 1998-2000 border war, UNMEE was deployed to monitor a Temporary Security Zone (TSZ) separating the two Horn of Africa countries. Eritrea has been critical of the UN for not forcing Ethiopia to accept the border delineated in 2002, awarding Badme – the town that triggered the conflict – to Eritrea.

Last month, the Security Council urged the two parties to sit down with the commission charged with setting a permanent border and to abide by its decisions.

General Singh recalled the Council’s statement at Saturday’s meeting, which brought together military leaders from both sides, and cited other initiatives aimed at fostering a breakthrough. “We remain hopeful that with the support of the international community, these initiatives will indeed be the watershed in the peace process,” he said.

On the overall situation in the Mission Area, Major General Rajender Singh noted that there had not been any significant changes in recent months, but voiced concern about the continued presence of groups of Eritrean armed personnel in certain areas within the TSZ.

He also spoke about constraints faced by UNMEE as a result of Eritrea’s restrictions, including helicopter flight ban, which continues to impede the rapid evacuation of sick or injured peacekeepers while reducing the mission’s monitoring capability. Last week, an UNMEE peacekeeper, Lance Corporal Kamble Ramesh Annappa, died of cardiac arrest after Eritrea refused the mission’s request for a medevac.

General Singh also voiced concern about the number of mine incidents registered in the last two months – six in all on both sides of the border. “These have not only resulted in fatal and serious casualties to civilians, but have also emerged as a major threat to the peacekeepers on both sides of the southern boundary of the TSZ,” he pointed out, urging both parties to address the menace.

Also speaking at the meeting, Brigadier General Otisitswe Tiroyamodimo of the African Union (AU) appealed to Eritrea to remove the flight restrictions against UNMEE.

Ethiopia’s representative, Major General Yohannes Gebremeskel, expressed his Government’s commitment to the cause of peace and promised full cooperation with UNMEE. “UNMEE is an instrument of peace and stability between Ethiopia and Eritrea,” he said, urging the international community to take the necessary steps to restore the mission to its full operating capacity.

Eritrea’s delegate, Colonel Zecarias Ogbagaber, said his country was committed to the peace agreement but stressed that it was “up to Ethiopia to abide by the decision of the Boundary Commission.” He said the flight ban and other restrictions were only expressions of Eritrea’s frustrations. “UNMEE is here to facilitate demarcation; not to manage an indefinite stalemate,” he said. “Eritrea has the right to resort to whatever measure it deems necessary to assert its territorial rights.”