NAIROBI (Reuters) - A bomb exploded in a small market town near Eritrea's border with Sudan last week, killing one person and wounding eight others, the government has said.

The Red Sea state accused its neighbour Ethiopia of using "terrorist" elements to attack it -- an accusation that the two foes often level at each other.

Relations between the regional rivals are at their lowest ebb since a 1998-2000 border war in which 70,000 people died. The course of the border remains in dispute.

"One person was killed and about eight others sustained injuries in the terrorist attack through a time bomb ... last Friday," Eritrea's Ministry of Information said on its website late on Wednesday.

The blast could not be independently confirmed, nor was the Ethiopian government available for comment.

"In continuation of (Ethiopia's) acts of hostility, provocation, incursion ... terrorists sponsored by the regime carried out terrorist acts in Teseney resulting in damage to civilians," the ministry added.