Amid rising concern over its Renaissance Dam, Ethiopia's ambassador in Khartoum has asserted the project will benefit Egypt and Sudan.
Ethiopian plans to build a $4.7 billion hydroelectric dam, for which it began diverting a stretch of the Blue Nile two weeks ago, have raised concerns in Egypt and Sudan, both dependent on the world's longest river for their water supply.
The dam will help fulfill Ethiopia's growing electricity demands and reduce levels of silt in the Nile, Ambassador Abadi Zemo said in comments to Sudanese newspaper Al-Maghar on Thursday.
Egypt, Sudan and Ethiopia would have access to water stored by the dam, he added
Both downstream countries claim the dam violates a colonial-era agreement which allocates them the lion's share of the Nile's water.
Ethiopia and other upstream neighbours, including Kenya and Uganda, argue the agreement is not equitable.
Zemo did not deny that Ethiopia might accept funds from Israel for the dam project if it was offered "unconditionally."
But Ethiopia would not accept Israeli financing if the latter pushed for a war with Sudan as a condition, he added.
In such as scenario, "We'd rather ask it to take its money and go. We'd rather live poor, but in peace with Sudan."
Dismissing Sudanese concerns that the dam, which is being built near its border with Ethiopia, will affect its vital water supplies, Zemo said the dam would protect his country and its northern neighbour from flood waters.
While Egyptian officials are searching for a diplomatic compromise, President Mohamed Morsi said in speech on Monday that Egypt does not want "war" but would keep "all options open" to protect its water supply.
In response, an Ethiopian foreign ministry spokesperson said Egyptian belligerence would not lead his country to halt the project.
Last week, Ethiopia summoned the Egyptian ambassador after politicians discussing the dam with President Morsi suggested Egypt should launch military action against Ethiopia or support rebels in comments they did not know were being broadcast live.
Egyptian opposition figure Mohamed ElBaradei commented on Thursday about the current standoff with Ethiopia:
"International law is not necessarily in our favour." ElBaradei said via Twitter. "International community does not sympathise with us due to our erroneous policies and arrogance."
ElBaradei, a Noble laureate and founding member of Egypt's largest opposition coalition the National Salvation Front (NSF), said a rational approach and cooperation with Ethiopia was necessary to solve the problem in both countries' mutual interests.
Egypt's foreign minister, who has said he will give up "not a single drop of water," is due to visit Addis Ababa in a few days for talks on the crisis.