The United Nations says restrictions imposed by Eritrea have limited the U.N.'s ability to watch the tense Eritrea-Ethiopia border.

A new report from Secretary-General Kofi Annan, released late Friday, says U.N. observers are able to monitor just 40 percent of the territory in their mandated area.

It says the observers' ability to give timely warning of any military action along the border has been "seriously reduced."

Eritrea has kept restrictions on U.N. helicopter flights and ground patrols despite a Security Council demand that the restrictions be lifted.

Eritrean leaders say the U.N. is doing too little to make Ethiopia accept a borderline drawn up by an independent panel.

The countries fought a two-year border war ending in 2000 that killed 70,000 people. The Security Council has threatened sanctions against both countries if they renew hostilities.