By Louis Charbonneau

UNITED NATIONS, July 29 (Reuters) - The U.N. Security Council is planning to disband its peacekeeping mission to the volatile border between Eritrea and Ethiopia after Eritrea forced out most of the U.N. troops, diplomats said on Tuesday.

The mandate for the 1,700-strong force expires on Thursday and a draft resolution circulated at the United Nations by Belgium calls for an end to the mission.

The resolution, which council diplomats said would be put to a vote on Wednesday, calls on the two sides "to show maximum restraint and refrain from any threat or use of force against each other, and to avoid provocative military activities."

The United Nations withdrew its peacekeeping force from the border in February after Eritrea cut off fuel supplies. The force had been in place since 2000 after a two-year war between the Horn of Africa neighbors that killed some 70,000 people.

Eritrea is angry that the United Nations has been unable to enforce a ruling by an independent boundary commission awarding the bulk of disputed border territory to Eritrea.

U.N. Secretary-General Ban Ki-moon warned in April that the withdrawal of the peacekeepers could spark renewed conflict on the 1,000-km (620-mile) frontier.

Eritrea's ambassador to the United Nations, Araya Desta, told Reuters Asmara did not want a military confrontation with Addis Ababa but was fed up with what he described as an illegal occupation of Eritrean territory.

"We have a right to take our land, to do anything possible to take back our territories," Desta said. "I don't envisage at this stage any use of military force to do that."

The Brussels-based think-tank International Crisis Group said last month the armies of the feuding neighbors were "less than a football pitch" apart, risking a catastrophic new war.

Asmara says a November 2007 "virtual demarcation" of the border by the now-defunct boundary commission ended the issue. Ethiopia says Eritrea is illegally massing troops on the border in a supposedly demilitarized zone and it wants to discuss the border demarcation further.

The Eritrea-Ethiopia dispute is part of a set of regional tensions that extends into Somalia, where Ethiopian troops are supporting an interim government, and into Djibouti, whose forces clashed with Eritrean troops last month. (Editing by Chris Wilson)

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