The two countries have already rejected plans by the Eritrea-Ethiopia Boundary Commission to demarcate their frontier on paper.
The stalemate has left the status of the 1,000km border unclear and reinforced UN reports that both nations are militarily active in Somalia.
The commission's warning comes amid growing tension between the two countries, and fears of a war that could spill over into
Both countries fought a border war which ended in December 2000, when they pledged that they would implement any frontier decision by the panel.
Eritrea warned that the current stalemate was "not sustainable" and refused to rule out a new war with its historical foe in the Horn of Africa.
Threats next door
Further to the border war with
Meles Zenawi, the Ethiopian prime minister, told a news conference on Saturday that he had explained
"We too agree that dialogue is the best way, nevertheless as the direct victims of the aggression, we feel we might be forced at some stage to respond with force.
"It is our country that is being attacked. Naturally, we do not seek any light, green, red or yellow from anyone to protect ourselves.
"If, and when, we are convinced that all options of resolving the invasion through peaceful means are exhausted, only then we may act to respond in kind," he said.