Ethiopian military forces have crossed back into Somalia, four months after leaving, witnesses told the BBC.
Their reported return comes as Islamist militants continue to seize towns from the fragile Western-backed government.
One resident said he saw Ethiopian troops digging trenches in Kalabeyr, a key junction that links much of Somalia to the Ethiopian border.
An Ethiopian spokesman denied the reports. Its troops left Somalia in January after two years in the country.
They entered Somalia in 2006 to help oust Islamist forces from the capital Mogadishu but withdrew under a UN-backed peace deal.
When its troops left, Ethiopia made it clear it did still reserve the right to intervene in Somalia if its interests were directly threatened.
There have been several reports of the Ethiopian military crossing into Somali territory for hot-pursuit operations, or to check vehicles moving in the border area.
The BBC's Elizabeth Blunt in Addis Ababa says the latest reported troop movements may well be part of a similar, limited operation.
But Ethiopian foreign ministry spokesman Wahade Belay denied the reports.
"This is a totally fabricated story. We have no plans to go into any of Somalia's territory," he told Reuters news agency.
Language
Kalabeyr resident Fadumo Du'ale told the BBC's Mohamed Olad Hassan on Tuesday: "They have crossed the border late last night and they are here now. They look to be stationing here."
The town lies 22km (14 miles) from the Somali-Ethiopian border.
Another resident, Tabane Abdi Ali, told the BBC: "We recognise them because of their military uniform and the language they were speaking."
Bus driver Farah Ahmed Adaan told our correspondent he had spotted "a lot" of Ethiopian troops with 12 military vehicles.
"Some of them were digging trenches while others were guarding the whole area," he said.
"They stopped me and checked my car and then ordered me to move."
On Sunday, fighters from the al-Shabab group, which is linked to al-Qaeda, took the key town of Jowhar from government forces.
This is the home town of President Sheikh Sharif Sheikh Ahmed and now that the country's rainy season has arrived, Jowhar is the only passable route into central Somalia from the capital.
Since withdrawing at the beginning of the year, Ethiopian troops have kept up a strong presence along the Somali border.
Ethiopia, a US ally, invaded its war-torn neighbour in December 2006 to prop up the transitional government and initially everything went according to plan.
Rebel resistance melted away before the 3,000-strong Ethiopian advance and the Somali government was able to set up in Mogadishu.
But the government did not extend its control and the Islamists continued to launch deadly attacks on both Ethiopian and Somali government forces.
About 4,300 Ugandan and Burundian peacekeepers from the African Union have arrived in Mogadishu, where they have taken up positions vacated by the Ethiopians in January.
But analysts say they are only in effective control of the presidential palace, airport and seaport in Mogadishu, while the Islamist guerrillas control chunks of the capital, along with swathes of central and southern Somalia.
Source: BBC
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