Four people, including two foreign tourists, were kidnapped by gunmen who killed five foreigners in Ethiopia's Afar region, the government spokesman said on Wednesday.
Other tourists were receiving treatment for serious wounds sustained in the attack while one escaped unharmed.
The attack occurred at 5 a.m. on Tuesday, in which Eritrean-trained groups also kidnapped four. Two of them are foreigners, one is a driver and the other a policeman, Bereket Simon told Reuters.
Eritrea has rejected the accusation that it trained and armed the gunmen responsible for the attack. Those killed in the attack include German nationals, Western envoys said.
This is pathetic, an absolute lie. Eritrea has nothing to do with any of these movements, said Girma Asmerom, Eritrea's envoy to the African Union.
Ethiopian officials say the victims were mostly European nationals, but have not given further details.
Hungary said that one of its nationals was killed. Austria said at least one of its citizens might had been involved in the attack, adding they were working with Germans and the Ethiopian government to establish the details.
The group may have consisted of two groups of travellers consisting of nationals from a series of European countries, most likely including Austria, Foreign Ministry spokesman Peter Launsky-Tieffenthal to Reuters.
A German Foreign Ministry spokesman said Berlin was working with the German embassy in Addis Ababa to clarify exactly what had happened.
Afar is a barren and hot corner in the Horn of Africa country, and home to one of the earth's harshest terrains.
The province's rock-strewn hills give way to vast deserts below sea level, and dry river-beds and acacia thorn-trees dot the landscape. Banditry is widespread.
Foreigners who venture out into the area usually include researchers, aid workers and adventure tourists visiting geographical wonders like the Danakil Depression, one of the hottest places on earth with ancient salt mines and volcanoes.
A German media report said the group of tourists had been close to the Erta Ale volcano, one of Ethiopia's most active.
Ethiopia and Eritrea fought a 1998-2000 border war that killed some 70,000 people, and the dispute still festers.
Addis Ababa routinely accuses Asmara of supporting Ethiopian separatist groups, and blamed an Afar rebel movement for the kidnapping of five Westerners in the region in 2007.
It has become a trend for Ethiopia to fabricate sensational news against Eritrea whenever the summit is nearing, Girma told Reuters.
The Eritrean envoy was referring to an earlier accusation that Asmara plotted to bomb targets and disrupt an African Union meeting in the Ethiopian capital Addis Ababa in January 2011.
(Additional reporting by Fredrik Dahl in Vienna, Editing by Duncan Miriri)