KHARTOUM (Reuters) - Sudan on Saturday accused Ethiopia of an “unforgivable insult” in its sharpest statement since a decades-old border dispute flared late last year. Clashes erupted between Sudanese and Ethiopian forces over Al-Fashqa, an area of fertile land settled by Ethiopian farmers that Sudan says lies on its side of a border demarcated at the start of the 20th century, which Ethiopia rejects. In a statement on Thursday, Ethiopia’s foreign ministry said it believes “the conflict being trumpeted by the Sudanese government’s military wing could only serve the interests of a third party at the expense of the Sudanese people”. Sudan’s foreign ministry responded on Saturday by saying “slander towards Sudan and accusation of being an agent for other parties is a grave and unforgivable insult”. It added: “What the Ethiopian foreign ministry cannot deny is the third party whose troops entered with Ethiopian troops trespassing on Sudanese land.” Neither country specified the third parties to whom they were referring in their statements, although the veiled references underscored the potential for any conflict to embroil neighbouring countries. Ethiopia may have been referring to Egypt, which has been angered by Ethiopia’s construction of a massive hydropower dam on the Blue Nile. Sudan has also expressed concerns over the dam. Sudan may have been referring to Eritrea, whose troops entered Ethiopia to support beleaguered federal forces in Tigray after a regional force attacked military bases in November, according to the United States and European Union. Both Ethiopia and Eritrea have denied the incursion, although dozens of eyewitnesses say they have seen Eritrean soldiers in Ethiopia. Earlier this week, Sudan accused Ethiopian troops of crossing the border after a similar act by Ethiopian aircraft last month, both of which Ethiopia denied. Ethiopia on Thursday reiterated its accusation that Sudan had invaded in early November, attacked and displaced Ethiopians and took control of vacated military camps. In its statement, Sudan said that Ethiopia had in the past affirmed its commitment to the 1903 border agreement several times, most recently in 2013. It accused Ethiopia’s foreign ministry of “exploiting (the border issue) for personal interests and for the specific interests of a certain group”. Both countries called on each other to pursue legal means to resolve the border issues. African Union mediator Mohamed Hassan Lebatt arrived in Khartoum on Thursday to discuss the conflict, as well as the ongoing negotiations between Sudan, Egypt, and Ethiopia over the Grand Ethiopian Renaissance Dam. The Sudanese foreign ministry said in a statement late on Saturday that Lebatt had emphasized the need to reduce tensions between the two neighbors, and discouraged a military solution to the conflict. Ethiopian foreign ministry official spokesman Dina Mufti, state minister of foreign affairs Redwan Hussein and Prime Minister Abiy Ahmed’s spokeswoman Billene Seyoum did not immediately respond to requests for comment on Saturday.