The Islamic courts took control of Mogadishu and an area of southern Somalia in June, meaning that the government is flanked by opposition forces on three sides.
Ethiopia says it has sent only several hundred military advisers into Somalia and that the Islamic courts are spoiling for war.
At the weekend, there were two days of clashes between pro-government troops and Islamic courts fighters around Diinsoor, south of Baidoa.
"If deployment of troops is made following the UN resolution, then an all out war will be inevitable."
Yussuf, Nairobi, kenya
Send us your views
Forces from both sides were said by witnesses to be massing near the town of Tiyeglow, 140km northwest of Baidoa, on Tuesday in preparation for a possible clash.
Mohammed Adow, Al Jazeera's Somalia correspondent, thinks that this time the Islamic courts will stick to the deadline, saying it is a culmination of rhetoric between the two sides.
He says Ethiopia is "hell bent" on protecting the Somali government and has said it will defend any attack on government forces.