Ethiopia said Monday that Eritrea's rejection of a mediation bid last week has diminished chances of resolving their border conflict peacefully.

Fears are growing of another surge in fighting on the Ethiopian-Eritrean border after a peace effort led by the Organization of African Unity broke down Friday."The intransigent and inflexible position on the part of the Eritrean government and its latest rejection of the decision of the OAU summit has greatly diminished the chance of resolving the crisis by peaceful means," the Foreign Ministry said in a statement.

The warning came as Ethiopian state television showed thousands of militiamen reporting to their units and heading to the front.

At one marshaling center in southern Ethiopia, television showed hundreds of men cleaning their assault rifles. Others sang war songs as they boarded buses destined for the disputed northern border.

Young Ethiopian men were also shown lining up for medical check-ups at registration centers throughout the country.

One volunteer interviewed by government television said he decided to fight after seeing reports of "Eritrea's brutality in which its planes killed schoolchildren in an air raid."

Fund-raising for the war effort is also in full-swing with a committee coordinating millions of dollars in donations to the war chest, television reported.

Ethiopian peasants were shown trekking to nearby villages to donate chicken, goats, oxen and sheep. Others brought cooked food, eggs and clothing.

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Fighting first broke out on May 6 and escalated into tit-for-tat airstrikes on border towns in early June before both sides agreed to a U.S.-brokered moratorium.

Thousands of troops have fought on three fronts over the 625-mile frontier, although there have been no significant battles since June 11.

Ethiopia said Friday the moratorium on airstrikes could be at risk after Eritrea accused its Horn of Africa neighbor of violating the deal. Ethiopia has canceled commercial flights to the northern province of Tigray for safety reasons.

The fears of renewed fighting were sparked by the collapse of a U.S.-Rwandan initiative Friday promoted by three African presidents on behalf of the OAU.

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