NAIROBI, Feb 8 (Reuters) - A landmine explosion ripped through a bus killing two people and seriously injuring six others near Eritrea's volatile border with Ethiopia, the Information Ministry in Asmara said.

Continued tensions along the two Horn of Africa neighbours' border have fuelled fears of renewed conflict, eight years after the end of a two-year border war that killed 70,000 people.

Landmines buried from that conflict and Eritrea's earlier independence fight remain a hazard, but Asmara said the mine involved in the bus blast was newly planted.

"Two passengers were killed and a number of others injured when a public bus was destroyed by a mine planted by terrorists sponsored by the regime (Ethiopia) along the Shilalo-Barentu road," Eritrea's Ministry of Information said late on Thursday.

The ministry said on its Web site the attack was "part of the TPLF regime's (Ethiopia) continued acts of hostility, incursion and mine planting against Eritrea's sovereignty and territorial integrity directly or through terrorists."

Ethiopia ridiculed that as "pure fabrication".

"Eritrea's allegation that a mine was planted by terrorists supported by Ethiopia is pure fabrication aimed at misinforming the international community," Foreign Ministry spokesman Wahde Belay told Reuters.

"The allegation is aimed at hiding Eritrea's warmongering policy and its support to train, arm and dispatch terrorists into Ethiopia to destabilise the country."

Both nations routinely accuse each other of terrorist acts.

Last week, Eritrea blamed "terrorist elements" sponsored by Ethiopia for a time-detonated bomb that killed one person and wounded eight others along the border with Sudan.

Asmara and Addis Ababa have been deadlocked over their 1,000 km (620 mile) border since an independent boundary commission gave the symbolic town of Badme to Eritrea. (Additional reporting by Tsegaye Tadesse, writing by Jack Kimball, editing by Andrew Cawthorne and Mary Gabriel)