Ethiopia has stepped up its war against Eritrea by bombing military targets just 60 miles from the capital, Asmara, while hundreds of thousands of Eritrean civilians continued to flee their homes, some into neighbouring Sudan.
Ethiopian fighter jets attacked the targets near the port of Massawa on Wednesday night. Eritrean officials said the planes had bombed the small town of Irafalle, killing one woman. Ethiopia insists it is not carrying out an invasion.
"Our objective is to regain Ethiopian sovereign territory. It is a military engagement, not an occupation," a government spokeswoman, Ms Salome Tadesse, said.
The speed and ferocity of the Ethiopian attack, which started after peace talks failed a week ago, has caught Eritreans unaware. The government has closed all schools and universities and men over the age of 18 are being conscripted into the army.
However, in the Ethiopian capital, Addis Ababa, where the war is enormously popular, there was a mood of quiet jubilation. "I feel like a hero and I'm very proud of our soldiers. The Eritreans have taken our land. The solution is to defeat them," a restaurant cashier Mr Lundat Endale (24), said.
The biggest success of the surprise Ethiopian campaign has been the capture of the key military town of Barentu in the west of the country, effectively cutting off Eritrean supply lines to Asmara. Now Ethiopia controls almost all of the entire western section of the 620-mile disputed border area. There were also artillery exchanges yesterday on the eastern front.
The loss of Barentu was greeted with shock in Asmara. Fears that Ethiopia would try to take the city, unthinkable to Eritreans just a few weeks ago, have been fuelled by the aerial bombing near Massawa.
Correspondents in the city reported that the mood is tense and sombre. Rumours are rife as a siege mentality sets in and anger at the international community, which has just imposed a 12-month arms embargo on both sides, is growing.
"This is a clear invasion. If the UN Security Council doesn't impose harsh sanctions against Ethiopia, then the UN is failing in its duty. It is diluting its own charter and principles," said a presidential spokesman, Mr Yemane Ghebremeskel.
However, in Addis Ababa yesterday, there was a palpably unbeat atmosphere. The only sign that a war was being prosecuted 500 miles to the north was the small groups of relaxed soldiers patrolling the streets.
"Now that we've gone this far we might go all the way," said one former soldier. "To be honest, even if the government wanted to pull back at this stage it couldn't. It would be politically unacceptable with the people".
But the war is also starting to take a huge humanitarian toll in Eritrea as at least 500,000 frightened civilians flee their homes in the face of the advancing Ethiopian army. People from Barentu are moving to Keren, 120 miles to the north-east. Some 3,000 people are being accommodated in one makeshift camp, but local administrators said they expected many more people in the coming days, most of whom were arriving on foot.
The UN High Commissioner for Refugees (UNHCR) reported that 50,000 civilians, from the area north of Barentu, had fled in the opposite direction and crossed the border into neighbouring Sudan in just one day. The local government has appealed to the international community for emergency assistance.
Ethiopian troops are now moving towards the central border area. They are just 25 miles from Mandefera, which lies north of the heavily defended town of Zalambessa. Mandefera is expected to be the scene of the next major engagement.
Ethiopia insists that its objective is not to take over Eritrea. However, having moved well beyond the disputed zone, Ethiopian officials refused to say how far they intend to penetrate into Eritrea before halting the current offensive.
"All through this the Ethiopians have refused to specify which areas the Eritreans should withdraw from. Their answer has been that the Eritreans know already," said one experienced Western diplomat.
After a week of relatively easy battles, the Ethiopians are also bracing themselves for a vigorous Eritrean counter-offensive.