Italy on Friday expressed serious concern over an Ethiopian attack on neighbouring Eritrea and asked its two former colonies to co-exist peacefully.

Italy "seeks the normalisation of bilateral relations between Ethiopia and Eritrea, which is an essential condition to promote stability in the region," the foreign ministry said in a statement, expressing "serious concern".

Ethiopian government spokesman Shimeles Kemal said Thursday's attack on an Eritrean military base was in response to the killing of five European tourists on its territory in January.

Two Germans, two Austrians and one Hungarian were killed in the January attack on the slopes of Ethiopia's famed Erta Ale volcano in the desolate Afar border region. Ethiopian rebels claimed responsibility for the attack.

Addis Ababa accuses Asmara of training "hit-and-run terrorists." Eritrea denies the charge and instead says Ethiopia has launched attacks against it since the end of their bloody 1998-2000 border war, which left at least 70,000 dead.

The two countries remain at odds over a disputed border town, which was handed to Eritrea under a ruling by a UN-backed boundary commission that Ethiopia has has refused to acknowledge.

Eritrea broke away from Ethiopia and won independence in 1993 after a 30-year struggle.