Dan Connell is the Board Chair of Middle East Research & Information Project (MERIP) and the author of Against All Odds: A Chronicle of the Eritrean Revolution (Red Sea Press, 1997). A fuller version of this article appeared in the Fall 1998 MERIP journal; for other reports, see www.merip.org

In the arid, mountainous, northeastern corner of Africa, two of the world's poorest but best armed states-Eritrea and Ethiopia, allies until a short while ago-are on the brink of all-out war. Shuttle diplomacy by a succession of would-be mediators has failed to provide an exit, though it has temporarily halted the fighting. Since then, the two countries have mobilized hundreds of thousands of troops and a staggering arsenal of Cold War arms to do battle over less than 100 square miles of disputed scrub farmland and desert.

Both states have put their survival on the line. Ethiopian media have challenged the legitimacy of Eritrea's possession of two ports on the Red Sea, while Ethiopia remains land-locked, fueling speculation that an Ethiopian plan to grab the port of Assab was the motive of the present crisis. The conflict has already begun to reconfigure the balance of power elsewhere in Africa, disrupting both the alliance of "front-line states" that support Sudanese opposition groups and the wider group of African states that helped bring Kabila to power in Congo. It has also dashed US hopes for regional stability, increased investment, and trade opportunities.

The build-up of tensions in the Horn took over a year to explode. When the conflict finally erupted, the Eritreans mobilized virtually the entire adult population and went on the offensive. A tour of the battlefront in Zal Ambessa in August found Eritrean forces in control of the strategic high ground, while civilians camped in caves and improvised shelters in protected valleys, returning to their homes only during lulls, to feed their animals and repair damaged homes. Ethiopian attempts to penetrate the border had been repelled, revealing a network of bunkers and trenches constructed months earlier, thus reinforcing Eritrean suspicions that the confrontation had been planned long in advance. International mediation efforts-led by an ad hoc team from the US and Rwanda-nearly avoided the outbreak of hostilities in May, but carelessness with a key provision to demilitarize a contested corner of Eritrea put both sides back on a war-track from which neither one now seems able-or willing-to retreat.

Allies in Conflict

For 30 years, the Horn of Africa served as one of the Cold War's most intense-and destructive-battlefields. The US and the USSR took turns pumping billions of dollars in arms into Ethiopia to help a succession of cruel dictators crush the war for the independence of tiny Eritrea-an Italian colony annexed by Ethiopia with US backing in the 1950s. Tens of thousands perished in the fighting and hundreds of thousands more were displaced as war combined with drought to create a disaster of biblical proportions. The legacy of these years-the poverty, the social dislocation, the rival nationalisms and the weapons left behind by the departing superpowers-now threatens to transform a localized hiccup into a regional contagion.

The Eritrean People's Liberation Front (EPLF) led the protracted independence war. In 1975, another nationalist movement-led by the Tigray People's Liberation Front (TPLF)-arose in the neighboring Ethiopian province of Tigray. The EPLF assisted the TPLF until the mid-1980s when the two quarreled over gradations of socialist ideology. These differences were never fully resolved, nor was the passion behind them ever deflated, though their public airing ceased. Near the end of the decade, the EPLF resumed support for the TPLF, providing artillery support for their final drive against a beleaguered Addis Ababa government and helping them to seize power in May 1991. Shortly after the cessation of fighting, the EPLF and the TPLF-supported Ethiopian People's Revolutionary Democratic Front cemented an agreement under which Eritrea held a referendum two years later on the former colony's status. As a result, Eritrea became independent, and the two states began to develop what appeared to be a close political alliance, maintaining open borders and cooperating on a number of critical regional issues.

Relations began to unravel in 1997. The first military incident occurred in July of that year when Ethiopian troops took over Bada, a small village in southwestern Eritrea. Eritrean protests produced no results. A month after the incident, Tigrayan forces took similar action in the village of Badame along Eritrea's southwestern border, an area that had been under EPLF control in the war years but which the TPLF now claimed was part of Tigray. Here the situation eventually led to a full-scale military confrontation, though the Eritrean government suppressed news of the escalating tensions for months, leaving observers inside the country and out to be taken by surprise when the conflict suddenly hit the headlines.

The turning point came after Ethiopian forces shot at an Eritrean patrol on May 6, killing four. The Eritreans responded by rolling into Badame and securing the area. The Ethiopian parliament used the incident as a pretext to declare war, and on June 5 Ethiopian jets bombed Eritrea's military airport in Asmara, the capital. This led to a retaliatory Eritrean raid in the Tigrayan capital, Makele, an hour later. Shortly afterward, heavy ground fighting broke out on along the border, and all-out war appeared imminent. On June 14, President Clinton brokered a moratorium on air attacks in phone conversations with the two leaders. A fragile truce has been in effect since then.

These incidents took place against a backdrop of rising tensions over economic issues. In November 1997, Eritrea issued its own currency (the nakfa), floating it last May. Eritrean officials called on Ethiopia to accept it as legal tender within Ethiopia-asking that both countries' currencies be used interchangeably. The Ethiopians declined, insisting that all monetary exchanges be made in hard currency, causing a sudden disruption in trade. Amidst rising tensions, the Ethiopians claimed that Eritrea was over-charging them for oil refined at the port of Assab and increased grain prices. In May, the Addis Ababa government cut all trade through Assab, rerouting it through the former French city-state of Djibouti, while also cutting air and communications links with Eritrea and declaring an air and sea blockade of the country.

By a stroke of unintended irony, it was also in November 1997 that Ethiopia issued new versions of its traditional currency, the birr. A close look at the map on those printed bills shows that the disputed areas along the border with Eritrea appear for the first time as part of Ethiopia.

Complicated Nationalisms

Unlike other post-Cold War conflicts, this crisis is not driven by external interests, nor is it rooted in ethnic or religious differences. There are political departures between the two sides, but they were until recently more a case of variations in line than clashes in ideology. Their leaders, Eritrean President Isaias Afwerki and Ethiopian Prime Minister Meles Zenawe, have long been personal friends. Now, they preside over the largest military mobilization in Africa since the end of the Cold War.

Although the Eritrean and Ethiopian leaderships cooperated during the immediate postwar years, deep-seated tensions over the long conflict-which claimed hundreds of thousands of lives between 1961 and 1991-remained. Weapons on each side left over from the 1970s and 1980s only heightened this potential. But there is a second, complicating factor at work here: the 1991 fall of the Soviet-supported Mengistu regime in Ethiopia. Like the US-backed Haile Selassie government before it, the Mengistu regime was dominated by the Amhara people of central Ethiopia and fed not only Eritrean national aspirations and eventual independence, but also unleashed Tigrayan nationalism.

Long down-trodden as Ethiopia's underclass, the Tigrayans attempted to establish Tigray as an autonomous region in the early 1990s, pursuing a development strategy they termed "ethnic federalism." Having called for an independent Tigrayan Republic in the 1970s, they retained their option to secede if a reconfigured Ethiopia was not to their liking. Provincial boundaries were redrawn to reflect ethnic identities, and power and resources were devolved onto regional administrations. This gave Tigrayans a chance to build their own mini-state. They also benefited from their dominant position within the governing coalition in Addis Ababa, as resources were channeled northward. Ethnic strife continued within Ethiopia, however, notably in the south where the Oromo people constitute a near majority. One factor pushing the resumption of conflict with Eritrea may be the need to focus attention on an external threat in order to unify the fractured society within Ethiopia.

Meanwhile, many Ethiopians displaced from power when the Tigrayans took over in 1991 were incensed at the concurrent loss of Eritrea. Amharas-having presided over the growth of the Ethiopian Empire over the past century-chaffed under the Tigrayans. Thus, the border dispute was injected into a wider arena, pitting the Eritreans against two intersecting nationalisms-Tigrayan and (greater) Ethiopian. Not only did the Eritreans face a confluence of powerful antagonists, the Tigrayans who might have sought compromise were put in a squeeze, as other Ethiopians challenged both the sincerity and the effectiveness of their commitment to a strong, unified Ethiopia.

Political Negotiations

In response to the outbreak of overt hostilities in May, US and Rwandan emissaries quickly tried to mediate, coming up with a four-point plan calling for:

1. disengagement (with the Rwandans offering to put their troops in the middle);
2. international adjudication of the border issues;
3. an investigation of all charges and counter-charges; and
4. a return to positions held prior to the crisis.

The Ethiopians quickly accepted , but the Eritreans balked at point four, which not only required them to pull out of Badame, but to turn it over to Ethiopian military control. They called instead for the demilitarization of the entire area under whatever civil administration was in force at the start of the hostilities.

Eritrea may have missed a critical opportunity by not finding a way to work with the US/Rwandan peace proposal, but once the Asmara government voiced its displeasure with the plan-whose substance was released to the media before it was accepted in Eritrea-it was dead in the water. When the US went on to engineer endorsements of the plan by the OAU and the UN in an effort to pressure the Eritreans, they dug in their heels, charging an American tilt toward Ethiopia. From this point onward, Washington lost its position as an independent broker.

What seems clear now is that a viable agreement must contain guarantees that neither side will prejudice the outcome of territorial disputes in the interim period, that disputed areas will be demilitarized, and that forced removal of civilian populations will not be permitted. Eritrea's use of terms borrowed from the Israeli-Palestinian peace process-warning against the establishment by Ethiopia of "facts on the ground"-indicates a fear that anything short of a well-defined sequence of actions tied to a specific timetable will not be trusted. For their part, the Ethiopians have been adamant that there is nothing to talk about short of an Eritrean withdrawal. Meanwhile, they have opted to rearm for another round of fighting, while inviting Eritrean dissidents to set up bases inside Ethiopia and initiating secret talks with neighboring Sudan over common strategy. Such moves suggest a ratcheting up of the conflict-and the stakes-that could redraw not only political alliances but borders across this volatile region.