On 13 May 1998 Ethiopia, in what Eritrean radio described as a "total war" policy, mobilized its forces for a full assault against Eritrea. The Claims Commission found that this was in essence an affirmation of the existence of a state of war between belligerents, not a declaration of war, and that Ethiopia also notified the United Nations Security Council, as required under Article 51 of the UN Charter.
The fighting quickly escalated to exchanges of artillery and tank fire, leading to four weeks of intense fighting. Ground troops fought on three fronts. On 5 June 1998, the Ethiopians launched air attacks on the airport in Asmara and the Eritreans retaliated by attacking the airport of Mekele. These raids caused civilian casualties and deaths on both sides of the border. The United Nations Security Council adopted Resolution 1177 condemning the use of force and welcomed statements from both sides to end the air strikes.
There was then a lull as both sides mobilized huge forces along their common border and dug extensive trenches. Both countries spent several hundred million dollars on new military equipment. This was despite the peace mediation efforts by the Organization of African Unity (OAU) and the US/Rwanda peace plan that was in the works. The US/Rwanda proposal was a four point peace plan that called for withdrawal of both forces to pre-June 1998 positions. Eritrea refused, and instead demanded the demilitarization of all disputed areas along the common border, to be overseen by a neutral monitoring force, and direct talks.
With Eritrea's refusal to accept the US/Rwanda peace plan, on 22 February 1999 Ethiopia launched a massive military offensive to recapture Badme. Tension had been high since 6 February 1999, when Ethiopia claimed that Eritrea had violated the moratorium on air raids by bombing Adigrat, a claim it later withdrew. Surveying the extensive trenches the Eritreans had constructed, Ethiopian General Samora Yunis observed, "The Eritreans are good at digging trenches and we are good at converting trenches into graves. They, too, know this. We know each other very well".
Following the first five days of heavy fighting at Badme, by which time Ethiopia had broken through Eritrea's fortified front and was 10 kilometers (six miles) deep into Eritrean territory, Eritrea accepted the OAU peace plan on 27 February 1999. While both states said that they accepted the OAU peace plan, Ethiopia did not immediately stop its advance because it demanded that peace talks be contingent on an Eritrean withdrawal from territory occupied since the first outbreak of fighting.
On 16 May the BBC reported that after a lull of two weeks the Ethiopians had attacked at Velessa on the Tsorona front-line, south of Eritrea's capital Asmara and that after two days of heavy fighting the Eritreans had beaten back the attack claiming to have destroyed more than forty-five Ethiopian tanks; although not able to verify the claim, which the Ethiopian Government dismissed as ridiculous, the BBC reporter did see more than 300 dead Ethiopians and more than 20 destroyed Ethiopian tanks. In June 1999 the fighting continued with both sides in entrenched positions. About a quarter of Eritrean soldiers were women.
"Proximity talks" broke down in early May 2000 "with Ethiopia accusing Eritrea of imposing unacceptable conditions". On 12 May the Ethiopians launched an offensive that broke through the Eritrean lines between Shambuko and Mendefera, crossed the Mareb River, and cut the road between Barentu and Mendefera, the main supply line for Eritrean troops on the western front of the fighting.
Ethiopian sources state that On 16 May Ethiopian aircraft all returned to their bases after attacking strategic targets between Areza and Maidema, and between Barentu and Omohager, while heavy ground fighting continued in the Das and Barentu area and in Maidema. The next day Ethiopian ground forces with air support captured Das. Eritrean forces evacuated Barentu and fighting continued in Maidema. Also on 17 May, due to the continuing hostilities, the United Nations Security Council adopted Resolution 1298 imposing an arms embargo on both countries.
By 23 May Ethiopia claimed "[its] troops had seized vital command posts in the heavily defended Zalambessa area, about 100km (60 miles) south of the Eritrean capital, Asmara". But the Eritreans claimed they withdrew from the disputed border town of Zalambessa and other disputed areas on the central front as a "...'goodwill' gesture to revive peace talks" while Ethiopia claimed it was a 'tactical retreat' to take away one of Ethiopia's last remaining excuses for continuing the war, ("The scale of Eritrean defeat was apparent when Eritrea unexpectedly accepted the OAU peace framework."). Having recaptured most of the contested territories—and heard that Eritrean government in accordance with a request from the OAU would withdraw from any other territories it occupied at the start of fighting—on 25 May 2000, Ethiopia declared the war was over. By the end of May 2000, Ethiopia occupied about a quarter of Eritrea's territory, displacing 650,000 people and destroying key components of Eritrea's infrastructure.
The widespread use of trenches has resulted in comparisons of the conflict to the trench warfare of World War I. This trench warfare led to the loss of "...thousands of young lives in human-wave assaults on Eritrea's positions..." The Eritrean defences were eventually overtaken by a surprise Ethiopian pincer movement on the Western front, attacking a mined, but lightly defended mountain (without trenches), resulting in the capture of Barentu and an Eritrean retreat. The element of surprise in the attack involved the use of donkeys as pack animals as well as being a solely infantry affair, with tanks coming in afterwards only to secure the area.
The fighting also spread to Somalia as both governments tried to outflank one another. The Eritrean government began supporting the Oromo Liberation Front, a rebel group seeking independence of Oromia from Ethiopia that was based in a part of Somalia controlled by Somali warlord Mohamed Farrah Aidid. Ethiopia retaliated by supporting groups in southern Somalia who were opposed to Aidid, and by renewing relations with the Islamic regime in Sudan – which is accused of supporting the Eritrean Islamic Salvation, a Sudan-based group that had launched attacks in the Eritrea–Sudan border region—while also lending support to various Eritrean rebel groups including a group known as the Eritrean
This scenario takes place 3 years after the last border skirmishes between the two nations and Asmara ( Eritrean capital) has decided that a quick strike will gain her nation much needed resources that she feels Ethiopia has stolen.