Information Minister Bereket Simon told IRIN the last thing Ethiopia wanted was another conflict in the war-ravaged region.
"We have seen the information but there is no troop-massing along the border," the minister said. "There are normal day-to-day movements but that is all."
He added that if Ethiopia had been massing troops, the UN peacekeeping force which patrols a 25-km wide buffer zone would be aware.
"The last two years have been good years for Ethiopia apart from the drought," he added. "We would like to avoid any conflict. That is the last thing we need."
In a speech at the weekend marking the 13th anniversary of the liberation of Massawa, Isayas accused Ethiopia of massing troops on the border and of refusing to accept the border ruling issued by an independent boundary commission last year.
He claimed Ethiopia was trying to isolate Eritrea regionally and globally "by preventing it from receiving foreign aid". Both countries are suffering from a devastating drought.
"The weyane's [Ethiopia] futile attempts to terrorise Eritrea in a form of siege in collaboration with the governments of Sudan and Yemen are continuing," he said, in the speech broadcast by Eritrean radio.
"It is on this basis that we realise the weyane's reluctance to accept the ruling by the boundary commission," he said. "It is coming to light that the weyane never wants to accept the decision by the boundary commission."
The decision, issued last April, mapped out a new border between the two countries following a destructive border war from 1998-2000. Both countries claim to have been awarded the controversial village of Badme, where the conflict first erupted.
"Though its [Ethiopia] attempts to have the border ruling changed failed to bear fruit, it has not ceased from doing so," Isayas said.
"However, the most dangerous action of the weyane is that instead of removing people it settled inside sovereign Eritrean territory, the weyane is being observed to amass troops and increase military activities along the border," he said.
Last July, the Boundary Commission ordered Ethiopia to remove people it had been settling in a village on the Eritrean side of the border.
Bereket denied that Ethiopia was dragging its feet over the border ruling. "These are the sorts of groundless accusations he [Isayas] has made before to deflect attention from his own problems. They are very disturbing," he said.
The war of words comes as a high level meeting between the two countries took place in London over the weekend, hosted by the independent Eritrea-Ethiopia Boundary Commission (EEBC).
According to senior diplomats involved in the peace process, Ethiopia has lodged a series of clarifications against the 13 April border ruling.
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