ASMARA, April 12 (Reuters) - Eritrea warned arch-foe Ethiopia on Saturday that Asmara would defeat any attempt to renew hostilities after Addis Ababa urged the United Nations to take strong measures against the Red Sea state.

Eritrea and Ethiopia routinely trade accusations over their border dispute, which led to a 1998-2000 war between the Horn of Africa neighbours in which some 70,000 people were killed.

The two countries have been deadlocked over their 1,000 km (620-mile) frontier since a 2002 border ruling. Analysts fear even a small incident could trigger renewed hostilities.

"If war against Eritrea was difficult yesterday, it is impossible today," Eritrea said in a statement in the English-language Eritrea Profile newspaper.

But Ethiopia said on Friday the United Nations should punish Asmara for cutting off fuel supplies to U.N. peacekeepers stationed on Eritrean territory, forcing the mission to almost completely withdraw.

U.N. Secretary-General Ban Ki-moon said last week that a new war could break out if the force abandons the border.

"The minimum expected of the Security Council now must be the strongest condemnation of Eritrea for these violations and insistence on immediate Eritrean reversal of all recent transgressions," Ethiopia's Foreign Ministry said in a statement.

"Ethiopia now calls on the Security Council and the Secretary General to prevent Eritrea getting away with its defiance yet again and to act against its egregious violations."

Ethiopia has repeatedly called for talks on border demarcation and normalisation of relations before it will pull back from areas assigned to Eritrea by a boundary commission decision of 2002.

Eritrea rejects this, saying Ethiopia must remove all its troops from the Red Sea state's sovereign territory before talks can happen. (Reporting by Jack Kimball in Asmara and Tsegaye Tadesse in Addis Ababa; Editing by Catherine Evans) (For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ )

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