During the Eritrean-Ethiopian War (1998–2000), Ethiopia channeled most of its trade through Djibouti. Though Djibouti was nominally neutral, it broke off relations with Eritrea in November 1998, renewing relations in 2000. Eritrea's President Isaias Afwerki visited Djibouti in early 2001 and Djibouti's President Ismail Omar Guelleh made a reciprocal visit to Asmara in the early summer of 2001. While Guelleh has close ties with Ethiopia’s ruling Ethiopian People's Revolutionary Democratic Front (EPRDF), he has tried to maintain an even hand, developing relations with Eritrea.
On June 10, 2008 fighting broke out in the Ras Doumeira region between Djibouti and Eritrea. It resulted in Eritrean victory and the control of the Ras doumeira and Doumeira Islands. Eventually Eritrea withdrew from the border areas and the creation of a buffer zone between the two countries was created, moderated in a large part by Qatar, until Qatar pulled its peacekeeping troops in the early summer of 2017. Following the 2017 Qatar diplomatic crisis, Qatar withdrew its peacekeeping forces from the disputed territory. Shortly after, Djibouti accused Eritrea of reoccupying the mainland hill and Doumeira Island.
- "Qatar to deploy troops between Djibouti and Eritrea", June 7, 2010. Archived June 11, 2010, at the Wayback Machine
- "Djibouti, Eritrea in territorial dispute after Qatar peacekeepers leave". Reuters. June 16, 2017.
- "Djibouti, Eritrea agree to normalize ties strained since 2008". reuters.com. September 6, 2018.
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