Both countries claimed to have been awarded the symbolic village of Badme where their border war flared up in 1998, after a ruling issued by an international Boundary Commission in April 2002.
"The report [by the Boundary Commission] generally rejected Ethiopia's claims including (without mentioning it by name) the claim to the village of Badme where the war had started," HRW said in its 2003 World Report.
But, according to diplomatic sources, Ethiopia is currently preparing a comprehensive legal challenge to the Eritrea-Ethiopia Boundary Commission (EEBC) ruling.
In its section on Eritrea, HRW said the Commission "gave a ruling favourable to Eritrea".
"Although the exact boundary between the two countries was still to be demarcated, many of the most intensively-disputed areas would fall on the Eritrean side of the border," the rights group said.
However, it called into question human rights issues in both countries.
Eritrea, it said, "remained a country under siege - from its own government".
"Nine years after Eritrea obtained its independence, no institutions existed to restrain government abuses, and presidential rule by decree continued unfettered," it said. A group of 11 government dissidents, arrested in September 2001, were still in jail and the private press remained closed.
In Ethiopia, human rights conditions "did not perceptibly improve" in 2002 and in the south, they "significantly worsened", the report said. It cited police shooting into groups of civilians and conducting mass arrests.
"Political parties were permitted to exist but their activities were sometimes hindered, especially at local levels," it noted.
It went on to state that the international community had poured in funding to help the country develop, but turned a blind eye to human rights violations "preferring to support Ethiopia's fragile, relative peace in a troubled region and not wishing to jeopardize Ethiopia's cooperation in fighting terrorism".
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