Ethiopia has threatened to terminate the peace agreement that ended its border war with Eritrea.
An Ethiopian government statement Tuesday said Foreign Minister Seyoum Mesfin has sent Eritrea a letter accusing it of "material breaches" of the 2000 Algiers Agreements.
The statement said Ethiopia is entitled to invoke the breaches as grounds for "legal and peaceful options" that include terminating the agreements or "suspending their operation in whole or in part."
The Ethiopian statement accused Eritrea of almost fully occupying the security zone between the countries and coordinating the activities of terrorist groups in the region.
There has been no immediate response from Eritrea.
Eritrea and Ethiopia fought a two-year border war from 1998 to 2000 that killed an estimated 70,000 people.
An independent border commission tasked with marking off the border awarded the disputed town of Badme to Eritrea. But Ethiopia has refused to accept that decision.
Both sides have repeatedly accused the other of raising tension in the region and blocking settlement of the border dispute.
The conflict has spilled over into Somalia. Ethiopia sent thousands of troops to Somalia last year to assist the country's embattled interim government. Eritrea recently hosted a meeting of Somali opposition leaders, including Islamists, who formed an alliance aimed at driving the Ethiopians out of Somalia.