The government of Sweden said it would be forced to re-examine its support programs to Ethiopia if the country resumes war with Eritrea. The statement came amid speculations that the two countries could once again go to war as the Eritrea-Ethiopia Boundary Commission recently made it clear that Badme, the flashpoint of the two-year war, was on the Eritrean side of the border.

Sweden and Ethiopia last week signed a 1.5 billion birr grant agreement to support Ethiopia's poverty reduction programs, but the big support could be halted if the country resumes war with its neighbor, Swedish officials warned last week.

"We would be forced to revisit our cooperation programs if there would be any resumption of hostilities," Lars Ronnas, Deputy Head of the Department for Africa with the Swedish government, said last week in Addis Ababa.

The 1.5 billion birr grant package is to support on-going programs in democracy and human rights, education, health and newly opened projects in judiciary, HIV/AIDS, road construction, private sector development, food security and budget subsidy.

The package was the biggest since the two countries began diplomatic relations about 50 years ago, it was learnt.