Ethiopia and Eritrea may return to war over their disputed border without foreign moves to resolve the crisis, warns the International Crisis Group.
Ethiopia is said to have 100,000 troops on the border with Eritrea
The ICG wants US and UN intervention as the military build up by both countries on the border is at alarming levels.
The International Boundary Commission has given the two countries till the end of November to mark the border physically or it will fix it on maps.
But foreign diplomats fear the deadline could end up being a trigger for war.
Some 80,000 people died during the border war between 1998 and 2000.
The disputed town of Badme was awarded to Eritrea in 2002, but Ethiopia insists on talks about the border demarcation.
The United Nations has a peacekeeping force of 1,700 charged with monitoring a security buffer zone on Eritrea's side.
Dec 2000: Peace agreement
Apr 2002: Border ruling
Mar 2003: Ethiopian complaint over Badme rejected
Sep 2003: Ethiopia asks for new ruling
Feb 2005: UN concern at military build-up
Oct 2005: Eritrea restricts peacekeepers' activities
Nov 2005: UN sanctions threat if no compliance with 2000 deal
"The risk that Ethiopia and Eritrea will resume their war in the next several weeks is very real. A military build up at the common border has reached alarming proportions," an ICG report on the crisis says.
The influential think tank now wants the US and the UN to make it clear to both governments that no destabilising unilateral action will be tolerated.
"There will be no easy military solution if hostilities restart - more likely is a protracted conflict on Eritrean soil, progressive destabilisation of Ethiopia and a dramatic humanitarian crisis," the report said.
The report comes after Eritrea for the third time, accused Ethiopia of planning an invasion.
But Ethiopia has dismissed the claims as a fabrication.
The ICG estimates that Eritrea has 4,000 soldiers supported by artillery and amour in the demilitarised zone and some 120,000 nearby.
And it says Ethiopia maintains 100,000 troops on the border with Eritrea.
The US views Ethiopia as its main ally in the region, while it has named Eritrea as sponsors of terrorism for backing the ousted Somali Islamists.