Eritrea has accused Ethiopia of attacking its security forces along the two countries' disputed border.
In a statement posted on its Web site late Wednesday, the Asmara government said Ethiopian troops made a failed, small-scale attack late Tuesday on Eritrean forces in the South Tsorona area.
The Ethiopian Foreign Ministry issued its own statement Thursday saying Ethiopian forces did not carry out an attack. The ministry confirmed a border incident but says the fighting may have stemmed from an accidental encounter between two reconnaissance missions.
The United Nations mission that monitors the border said its soldiers heard shooting sounds in the Tsorona area but could not go to the site because of access restrictions. In a statement, the mission urged both sides to exercise restraint.
Ethiopia and Eritrea fought a two-year border war starting in 1998 that claimed 70,000 lives. The dispute over the 1,000-kilometer border remains unresolved despite a peace accord reached in 2000.
U.N. officials have warned the border zone remains tense. Eritrea described Wednesday's incident as a continuation of Ethiopian aggression in the Gash-Barka and Southern regions. It accused Ethiopia of planting mines, abducting local residents and burning their crops.
An international commission created to finalize the border drew up a boundary in 2002, but Ethiopia refused to allow the commission's ruling to be implemented. The commission recently dissolved itself, leaving the two states to work out the dispute by themselves.