Eritrea has said Thursday's attack by its southern neighbour Ethiopia on its military bases is meant to divert attention from Ethiopia's illegal occupation of Eritrean territories.
"The objective of the attack ... is to divert attention from the central issue of the regime's flagrant violation of international law and illegal occupation of sovereign Eritrean territories," a statement from Eritrea's foreign ministry said on Friday.
"Eritrea ... will not be entrapped by such deceitful ploys that are aimed at derailing and eclipsing the underlying fundamental issues."
Ethiopia said on Thursday its troops raided three military bases in the Red Sea state which it said were used by Ethiopian rebels.
The assaults were the first on Eritrean soil that Addis Ababa has admitted to since the end of a 1998-2000 war that killed 70,000 people. Eritrea claims there have been others.
The statement came a day after Eritrea's information minister said his country was not ready to be sucked into renewed hostilities.
"It is those who do not know the price of war who are hungry to go to war," Ali Abdu told the AFP news agency.
"We fought enough for 30 years, and we will never be dragged into war through such hostile provocations as this."
He continued: "We do not support such groups, as these are the products of Ethiopia's own internal crisis and the result of a policy of exclusion and marginalisation."
A vicious row over the position of Eritrea and Ethiopia's shared border remains unresolved since the end of the 1998-2000 war.
The Hague-based Eritrea-Ethiopia Boundary Commission ruled in 2002 that the border village of Badme belonged to Eritrea.
But the village remains in Ethiopia and Eritrea blames the international community, and the United Nations in particular, for not forcing Ethiopia to accept the border.
Analysts say Eritrea has launched a proxy war in lawless Somalia to weaken Ethiopia as it cannot match it militarily.
President Isaias Afewerki's government has been slapped with sanctions for links with Somalia's al-Shabab rebels.
"I suspect there is little fallout to expect from the raid, unless Eritrea chooses to unleash one of its proxies, perhaps in Somalia," said J Peter Pham, director of the Michael S Ansari Africa Centre at the Atlantic Council, a Washington-based think tank.
"Of course, if that happens, it would give the lie to Asmara's hitherto denials of linkages with groups like al-Shabab."
Concerned that tensions between the two counties could escalate, the US and France urged Ethiopia and Eritrea to show restraint and to find a negotiated solution to their differences.
"We have heard the government's reports that its forces struck military posts inside Eritrea today," Victoria Nuland, the state department spokeswoman, told reporters on Thursday.
"We are obviously calling on both sides to exercise restraint and to avoid any further military action."
Bernard Valero, the French foreign ministry spokesman, said in a statement: "France urges both states to avoid military escalation and, more broadly, to avoid raising tension. France believes the only way of resolving the dispute between the two countries is through dialogue and negotiation."
Valero said the incursion had targeted camps "which Addis Abeba accuses Asmara of using to train rebel groups operating on Ethiopian territory".
Eritrea has dismissed these claims saying that it will not retaliate against its neighbour. It termed the allegations that it harbours armed groups against Addis Ababa as a "baseless and bogus lie".