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Edition: U.S. Article Comments (0) Save Email Print Reprints Most Popular Most Shared Analysis: U.N. rebukes of Israel permitted in U.S. policy shift 1:01am EDT Obama says ready to "'kick ass" over Gulf oil spill | Video 9:26am EDT BP siphons off more oil from well | Video 4:10pm EDT Apple unveils iPhone 4 to fend off Google | Video 07 Jun 2010 Iran says will not swap U.S. detainees for scientist 11:38am EDT Special Report: The incredible saga of Europe's A400M 5:34am EDT GM recalls 1.5 million vehicles on fire risk 12:38pm EDT Dow and S&P rise on commodities and banks, but tech dips | Video 4:27pm EDT Circumcision may prevent sex-related penis injuries 04 Jun 2010 Joran Van der Sloot confesses to killing Peru woman | Video 3:00pm EDT Analysis: U.N. rebukes of Israel permitted in U.S. policy shift 1:01am EDT GM recalls 1.5 million vehicles on fire risk 12:38pm EDT Obama says ready to "'kick ass" over Gulf oil spill | Video 9:26am EDT Gold could fall 40 percent from peak: Prechter 07 Jun 2010 Circumcision may prevent sex-related penis injuries 04 Jun 2010 Gates Foundation gives $1.5 bln for women's health 10:41am EDT Gold hits record high as risk aversion resurfaces 11:46am EDT PTSD may boost dementia risk in older vets 07 Jun 2010 Helen Thomas retires after Israel remarks 07 Jun 2010 Farmer fires home-made cannon to defend land 12:16pm EDT African Union welcomes Eritrea, Djibouti mediation deal Barry Malone ADDIS ABABA Tue Jun 8, 2010 3:58pm EDT ADDIS ABABA (Reuters) - The African Union Tuesday supported a mediation agreement between Eritrea and Djibouti, whose border standoff could destabilize the Horn of Africa region. World Djibouti's government said that further to the deal, Eritrea had withdrawn its troops from two areas they had occupied. The Red Sea nations, who share a coastline on a crucial shipping lane linking Asia to Europe, clashed over their border several times in 2008 and routinely exchange accusations. Jean Ping, chair of the AU Commission, said the countries had signed a deal that would see Qatar's Emir Sheikh Hamad bin Khalifa al-Thani mediate between them. "(Jean Ping) expresses the hope that this...endeavor would have a positive impact on the overall situation in the Horn of Africa...including the resolution of other bilateral disputes in the region," an AU statement said. "(Ping) is confident that the proposal to be made will indeed pave the way for a full normalization of relations between Djibouti and Eritrea," said the statement, which singled out the Somali peace effort as getting a boost from the move. Djibouti said Eritrean troops had withdrawn from two areas. "Mahamoud Ali Youssouf...confirmed the withdrawal of the Eritrean troops from Doumeira and the island of Doumeira," the foreign ministry said a statement, quoting its minister. "We are convinced that mediation is the best option to resolve this border problem." The United Nations last year imposed sanctions on Eritrea for refusing to pursue a peaceful solution to its border dispute with Djibouti, and for allegedly backing rebel groups in Somalia where at least 21,000 have died in fighting since early 2007. Eritrea denies all charges relating to the sanctions and sees Somalia as afflicted by Western interference. But analysts say the mediation deal is a sign the U.N. measures are working. Western security agencies fear Somalia could become a base for international attacks. Huge swathes of the war-ravaged nation are under the control of al Qaeda-linked Islamist rebels. OCCUPYING TERRITORY Djibouti, which is sandwiched between Eritrea and Somalia, backed the U.N. sanctions and accuses Eritrea of occupying some of its territory. The tiny state hosts France's largest military base in Africa and also a major U.S. base. The country's port is used by foreign navies patrolling the coast of Somalia to fight pirates who cost foreign firms millions of dollars in ransoms and insurance hikes. The former French colony of just 800,000 people is also the main route to the sea for Ethiopia, a regional ally of Washington. Eritrea -- which used to be part of Ethiopia -- fought a border war with that country from 1998 to 2000. In 2006, Ethiopia sent troops into Somalia to oust an Islamist group that had taken control of most of the capital in a move that was seen as backed by Washington. The move sparked an insurgency that still rages despite Ethiopia's withdrawal. Gas-rich Qatar has boosted its status as a peace broker in recent years, interceding in conflicts from Lebanon to Yemen and, most recently, Sudan. (Additional reporting by Abdourahim Artehin Djibouti) (Editing by George Obulutsa) World Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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