The commissions will diffuse the escalation of border incidents

The United Nations mission said the move is a "most positive and significant development".

The UN said it hopes the commissions can prevent small border incidents escalating into wider conflict.

Tensions between the two countries have risen since Ethiopia rejected an international border ruling awarding the symbolic Badme village to Eritrea.

Positive step

At a news conference in Asmara, UN Force Commander Major General Robert Gordon said he hoped the commissions could diffuse any incidents that might otherwise flare up.

This is the most positive and significant development that we've had in the MCC in the last few months, short of demarcation UN Force Commander Major General Robert Gordon

"The greatest fear that we all have, and it's shared by my colleague commissioners from Eritrea and Ethiopia, is of a flare up, a localised incident, which if there was trust and good communication on both sides could be damped down very quickly."

Major General Gordon, who chairs the Military Coordination Commission, the only place at the moment where Ethiopian and Eritrean officials regularly meet face to face, said the step should also ensure local stability.

"This is the most positive and significant development that we've had in the MCC in the last few months, short of demarcation."

The BBC' s Jonah Fisher in Asmara says that these commissions are not the beginning of political dialogue between the two countries, something that Eritrea rejects out of hand.

But, he says, it does show commitment from both sides to maintain stability and minimise tensions in the border areas.