Eritrea on Tuesday defended its decision to move troops into a UN-monitored buffer zone along its border with Ethiopia, citing its sovereign right over the area.
The United Nations on Monday accused Eritrea of moving 1,500 soldiers and 14 tanks closer to Ethiopia in violation of a six-year-old peace agreement ending a border war between the Horn of Africa neighbours.
Eritrea's presidential advisor Yemane Ghebremeskel said the troops were in the area to work on development projects.
"We have a broad range of development projects in that area," Yemane told Reuters by telephone from Asmara without elaborating. "What is the fuss about? This is sovereign Eritrean territory and this is perfectly understandable."
Ethiopia condemned Eritrea's troop movement as a provocation.
"Ethiopia strongly condemns the provocation which is in violation of the 2000 Algiers agreement," Ethiopian Information Minister Berhan Hailu told Reuters. "Ethiopia is keenly monitoring the movement of the Eritrean troops in the TSZ (Temporary Security Zone)."
The 2000 Algiers accord ended the two-year conflict between Ethiopia and Eritrea over a border of dusty villages and scrubby plains. The countries went to war in 1998 and the fighting killed an estimated 70,000 people before it ended in 2000.
Under the peace deal, both sides agreed to accept an independent boundary commission's ruling mapping the 1,000-km (620-mile) border as "final and binding".
But the peace process ground to a halt after Ethiopia rejected the commission's border and insisted on further talks, prompting Eritrea to restrict peacekeepers' movements, including a ban on helicopter flights over its territory.
A spokesman said UN Secretary-General Kofi Annan had urged Asmara to withdraw its troops from the buffer zone and co-operate with the United Nations in restoring the cease-fire arrangements.
The UN peacekeeping force in Ethiopia and Eritrea stands at 2,300 troops and military observers, down from 3,300 last May.
The Security Council last month threatened more cutbacks in the force unless the two countries made progress on their border.