Morning Edition · Saturday, October 10, 2026Published at 1:14 AM EDT · New York
Ethiopia's foreign minister says Eritrean forces have pushed up to 60 kilometers inside the country, while Asmara accuses Addis Ababa of waging war to seize the Red Sea port of Assab.
Eritrean soldiers have entered the towns of Adigrat and Idaga Hamus in Ethiopia's northern Tigray region, a commander allied with the Ethiopian government told the Associated Press (AP). The conflict monitor Armed Conflict Location and Event Data (ACLED) said the troops crossed the border at Zalambessa on Wednesday. It said Ethiopian military drones struck them at Guada as they moved toward Idaga Hamus. Residents of Adigrat, about 25 kilometers south of the border, told Reuters that two military vehicles carrying dozens of Eritrean soldiers passed through the town. AP said it could not independently verify the accounts.
Each government now says the other started a war. In a message to the United Nations Security Council, Ethiopian Foreign Minister Gedion Timothewos called the incursion an "all-out invasion" and said Eritrean troops had advanced up to 60 kilometers into Tigray, Al Jazeera reported. Eritrean Information Minister Yemane Gebremeskel said Ethiopia had pursued an unprovoked war of aggression against Eritrea for more than three years through its demand for sovereign access to the sea. He also accused Addis Ababa of using the current fighting to take the Eritrean port of Assab. Asmara has since asked the UN to intervene. Yemane has not confirmed or denied the border crossing. He told AP that Eritrea is "not in the business of refuting wild allegations." Ethiopian officials give different troop numbers. One senior official told AP that Eritrea has four divisions of about 1,500 soldiers each in Tigray, while other officials put the total at up to 8,000, according to France 24.
The two sides have switched places since the 2020 to 2022 war. In that war, Eritrean troops fought alongside Ethiopia's federal army against the Tigray People's Liberation Front (TPLF). Addis Ababa now accuses Asmara of backing the TPLF, which resumed fighting federal forces on September 23. On October 1, Ethiopia closed its embassy in Asmara and gave ten Eritrean diplomats 48 hours to leave. It cited "direct and indirect acts of hostility" after suspected drone attacks on Addis Ababa, and Eritrea responded by severing all diplomatic ties. That break reversed the 2018 rapprochement that won Prime Minister Abiy Ahmed the Nobel Peace Prize. Government Communication Minister Enatalem Melese said that "all foreign military forces operating within our sovereign territory must withdraw immediately."
Several outlets have described the incursion as an Eritrean push toward the regional capital, Mekelle. The reporting supports a narrower reading. Adigrat lies about 115 kilometers north of Mekelle, and the federal army retook Mekelle in early October. The TPLF has also lost Shire and Adigrat, and Ethiopian Airlines said flights to Mekelle would resume on October 11, France 24 reported. France 24 also reported signs that federal drone strikes had pushed Eritrean units back. Euronews reported that the strikes hit Eritrean vehicles near Adigrat as they withdrew from positions. Al Jazeera's analysis said Eritrea moved in to keep federal and allied forces from reaching the border and possibly fighting on Eritrean soil. On that evidence, Eritrea is holding a buffer zone, not attacking Mekelle. Even so, the incursion has put the two national armies in direct combat.
Outside powers have taken sides. Ethiopia's army chief accused Eritrea, Sudan and Egypt of supporting the rebels, and all three deny it. Sudan's army replied that Ethiopia lets its territory be used to supply the Rapid Support Forces (RSF). The United Arab Emirates and Qatar back the Ethiopian government. A Reuters explainer noted that, according to UN experts, the UAE has supported the RSF, while Sudan's army has had backing from Egypt and Eritrea. Egypt signed a maritime agreement with Eritrea in May, and Ethiopia has accused Cairo of obstructing its bid for Red Sea access. Russia's state news agency TASS quoted an expert who said the escalation raises the risk of direct war. TASS pointed to Ethiopia's statements about Red Sea access as a source of tension. China Daily's Hong Kong edition called the TPLF rebels and reported that the army and its allied "Tigray Peace Force" had retaken Mekelle, which is the Ethiopian government's account.
The financial pressure falls first on Ethiopia. In late September the official birr rate was above 160 per dollar and the parallel-market rate was near 180, Addis Insight reported. The outlet warned that higher defense spending and redirected remittances could push the currency weaker. Ethiopia is still in default on its $1 billion Eurobond, and holders recently rejected a revised restructuring offer, according to Horn Horizons. The next review of its $3.4 billion International Monetary Fund (IMF) program is still pending. Assab sits on the southern Red Sea close to the Bab el-Mandeb strait, where Houthi attacks have already cut commercial traffic.
What this means
The first channel is Ethiopia's balance of payments. War spending, lost remittances and dollar hoarding widen the birr's parallel-market discount and delay the IMF review and the Eurobond deal. Holders of the defaulted bond and foreign firms with birr earnings carry that risk. Much of it is already priced, because the bond is in default and the currency has lost most of its value since the 2024 float. What is new is direct contact between the two armies. Prime Minister Abiy wants to finish off the TPLF and keeps the sea-access claim alive. He has an air advantage through drones and backing from Abu Dhabi. A ground push into Eritrea toward Assab, however, would test Egypt's new commitments to Asmara and stretch an army already fighting in neighboring regions. President Isaias Afwerki wants a buffer zone and a weak central government in Ethiopia. His army can raise Ethiopia's costs through the TPLF and other proxies, but it cannot win a long conventional war against a much larger neighbor. In the desk's view, the consensus focus on a march on Mekelle is misplaced. The larger risk is an Ethiopian counter-escalation at the border. The precedent is the 1998 to 2000 border war, which ended in a stalemate. After the Algiers Agreement, both states stayed armed and hostile until 2018. The likelier outcome over the coming weeks is a contained border conflict. Ethiopian drones would keep striking Eritrean units inside Tigray, Eritrea would pull back toward Zalambessa, and the TPLF would turn to insurgency. On this read, the birr's parallel rate weakens further and the IMF and bondholder timetable slips into next year. This read holds only if Ethiopian ground forces stay on their side of the border. It would be proven wrong if Ethiopian troops cross into Eritrea, if Ethiopia strikes Assab or Massawa, or if Eritrean forces keep Adigrat despite the drone campaign.
What to watch
Synthesized from: Associated Press via ABC News · Al Jazeera · France 24 · The National (Reuters reporting) · Euronews
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Observations to monitor, not financial advice.
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