The strongest military power in the Horn of Africa, Ethiopia has the most direct and intense interest in Somalia of any external actor. To the west of Somalia's long border with Ethiopia lies the latter's Ogaden region, with a predominantly ethnic Somali population of four million people. In 1977, Somalia invaded Ogaden in order to annex it and create a Greater Somali state. Ethiopia won the ensuing war at considerable cost, but since then has faced a persistent insurgency.

With the rise of the I.C.C., some elements of which are irredentist, Addis Ababa fears with good reason that the insurgency could become more effective. Addis Ababa considers preservation of sovereignty over Ogaden to be a vital interest, which is the basis for its moves into Somalia to defend the T.F.G. and curb the I.C.C.'s drive west.

Ethiopia is also involved in a simmering border dispute with Eritrea, with which it fought a brutal war in the 1990s. Since then, Addis Ababa and Asmara have massed troops on their border, and Asmara has sought to undermine Addis Ababa in the region. The ascent of the I.C.C. has provided an opportunity for Asmara to create an anti-Ethiopian alliance, and Asmara has reportedly been a conduit for and supplier of weapons to the Courts and, according to Addis Ababa, to the insurgent Ogaden National Liberation Front (O.N.L.F.).

Although it is far larger and more populous and well-endowed militarily than its neighbors in the Horn, Ethiopia is riven by strife among its many ethnic groups, religiously divided between Muslims and Christians -- each comprising approximately 45 percent of its population -- governed by an increasingly authoritarian and unpopular regime that has played divide and rule among ethnic groups, and faced with an opposition that has begun to coalesce and that it has attempted to repress. In addition to the O.N.L.F. insurgency, the government confronts a similar situation in the Oromia region, where the Oromo Liberation Front (O.L.F.) fights a persistent guerrilla war and has joined with the O.N.L.F. and other ethnic factions in the opposition Alliance for Freedom and Democracy (A.F.D.).

Supported by Washington, Prime Minister Meles Zenawi is faced with too many problems to be a reliable proxy for Washington's attempt to roll back the rise of Islamism in Somalia. Ethiopia is currently in a cycle of instability, which is likely to deepen and impede Addis Ababa from undertaking a full-scale intervention into Somalia. Zenawi will, however, do whatever he can to contain the I.C.C. and tamp down the O.N.L.F.

During the first two weeks of August, Zenawi responded to an uptick in O.N.L.F. activity, fueled by the I.C.C.'s successes and possible support from the I.C.C. and Asmara, by ordering a "military sweep" in Ogaden on August 6 to suppress the insurgency. Zenawi claimed that peace talks to which both sides had agreed had broken down after discussions in the United States and Europe between local clan elders and O.N.L.F. leaders had failed to produce progress. Zenawi claimed that the "sweep" was requested by the elders.

The O.N.L.F. responded on August 7, stating that Addis Ababa's military action was nothing out of the ordinary and that Zenawi had announced it to reassure foreign hydrocarbon companies bidding on a gas contract in Ogaden that Addis Ababa was in control of the region. Indeed, the O.N.L.F. claimed that it had conducted extensive military exercises throughout the region that Ethiopian forces had been unable to prevent. On August 10, the O.N.L.F.'s leader, Admiral Mohamed Omar Osman refused to deny support from the I.C.C. and Asmara, saying that "any group that supports our cause is a friend." He blamed Addis Ababa for derailing peace talks by refusing to hold them in a neutral country and accept an independent mediator.

On August 10, Ethiopia's Ministry of Mines and Energy awarded the Malaysian oil company Petronas with a contract to develop the Calub and Hilala natural gas fields in the Ogaden. Petronas agreed to invest US$1.9 billion in the project and to build a refinery and a pipeline to Djibouti. The O.N.L.F. immediately reissued its warning to Petronas that Addis Ababa is not in effective control of Ogaden and "is not in a position to issue licenses," adding that it would not permit the company to exploit the resources and declaring that Ogaden is a "conflict zone."

The conflict spiked on August 11 when Addis Ababa reported that its troops had killed 13 O.N.L.F. insurgents as they crossed the border from Somalia and had captured their commanders. The O.N.L.F. did not deny the deaths, but claimed that none of its officers had been captured, accusing Addis Ababa of lying to reassure Petronas. On August 16, the O.N.L.F. claimed that its forces had killed 120 Ethiopian troops and wounded 141 on August 7, and had killed 16 Ethiopian forces and wounded 20 on August 12.

As tensions in Ogaden rose, Addis Ababa suffered its first serious military defection, when Brigadier General Kemal Geltu, an Oromo, and more than 150 soldiers and officers sought refuge in Eritrea. Geltu announced that he had joined the O.L.F. to fight for Oromo rights; Addis Ababa said that he was disgruntled because he had been passed over for promotion.

The instability of the Zenawi government and the pressures on it not only limit its room to maneuver in Somalia, but also throw Ogaden into play and raise the risks for Petronas, which is aggressively seeking new reserves as the ones under its control are depleted. Addis Ababa is under duress from within and without, and faces greater challenges in the wake of the I.C.C.'s ascent. It is not clear that Zenawi can afford a major military operation in Somalia, especially as Ogaden becomes a more intense "conflict zone." Addis Ababa is approaching its limits and is likely to engage in a testing game with the I.C.C.