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ASMARA (Reuters) - Eritrea's President Isaias Afwerki said renewed accusations that Asmara is arming Somalia's Islamist rebels was the work of CIA agents in the region bent on blackening his government's name.
"We don't interfere (in Somalia) and we don't want to see any terrorism prevail in Somalia," Isaias told Reuters.
Somalia's government has accused Eritrea of supporting al Shabaab insurgents with planeloads of AK-47 assault rifles, rocket-propelled grenades and other weapons.
To the anger of Asmara -- which says there is no evidence in accusations that have been around for several years -- the U.N. has ordered a probe and east African bloc IGAD wants sanctions on Eritrea including a no-fly zone.
"It's CIA operatives ... these people are liars," Isaias, a former rebel commander in power since 1991, said during an interview at Asmara's colonial-era presidential palace.
"This is a continuation of the old story. I know for sure, even the individuals behind these things. I don't want to talk about that because it would poison the whole mood."
Former U.S. president George W. Bush's government had threatened to put Eritrea on its list of state sponsors of terrorism, and Isaias said old interest groups were still jostling for influence with President Barack Obama.
He said Asmara would wait to see the impact of the Bush-Obama transition, and what he termed a bigger historical transition of U.S. economic ties and international attitudes.
"It is too early to judge," Isaias said, acknowledging that Washington had bigger priorities than his country.
"Eritrea is not a big deal. I don't expect the United States and officials in Washington will be sitting there and talking about how they formulate their policies with Eritrea.
"This is a transition, a very difficult transition. We need to be patient. It may take a long time."
Isaias said the new government of Somalia -- the 15th attempt to restore central rule in the last 18 years -- looked doomed to fail because it was imposed from outside.
"Leave this for the Somalis," he said.
President Sheikh Sharif Ahmed, a moderate Islamist, became Somalia's latest president earlier this year in a peace process in Djibouti brokered by the United Nations.
"This is the mentality of a gambler," Isaias said of the repeated attempts to set up a transitional Somali government with Western backing.
"This so-called government is not a government in terms of legitimacy. It cannot even influence one very small neighbourhood in Mogadishu, let alone Somalia."
Risking further criticism from the West, Eritrea was in March the first country to receive Sudan's President Omar Hassan al-Bashir after the International Criminal Court indicted him on accusations of war crimes in Darfur.
Isaias, like other African leaders, said the case was politically motivated and risked further destabilising Sudan.
"Whether he is guilty until proven innocent, or innocent until proven guilty, is another matter. It is a legal matter. That is an issue for extensive discussion," he said.
"It is purely a political case, it has no legality at all ... It doesn't serve any purpose for the people of Darfur."
Isaias said the West was not showing the same clamour for justice in other places, such as Sri Lanka.
"The government did not allow journalists to go there, they did not allow relief agencies to even operate freely in that very small area," he said of recent events in Sri Lanka where the army wiped out Tamil Tiger rebels.
"The casualties on civilians were huge. No one intervened."
Eritrea's long-running border dispute with Ethiopia, where the two lost tens of thousands of men in a 1998-2000 war, has taken a back seat in the headlines of late, with no reports of clashes and rhetoric quieter on both sides.
Asked if that meant Eritrea could scale down its army and use resources elsewhere, Isaias shook his head and shot back: "Never relax."
"I will never take any risk ... We retain the allocation of our resources in spite of the bitterness we have about it. We have no other option, unless we fully guarantee and see things have changed for good."