(adds Djiboutian president, background)
By Omar Hassan and Jack Kimball
DJIBOUTI/ASMARA, June 12 (Reuters) - Border clashes between Eritrea and Djibouti have killed nine Djiboutian soldiers and wounded 60 others in three days of fighting between the Horn of Africa nations, a defence official said on Thursday.
In the first fighting since the mid-1990s between two of Africa's smallest states, Eritrean and Djiboutian troops have exchanged fire along a part of their shared border overlooking strategic shipping lanes in the Red Sea.
Djibouti hosts French and U.S. military bases and is the main route to the sea for Eritrea's arch-foe Ethiopia.
Africa's youngest nation, Eritrea has fractious ties with the West, which accuses it of backing Somali insurgents and impeding U.N. peacekeepers on the Ethiopia border.
"The fighting is still ongoing. The dead and injured are more today, up to nine dead and 60 wounded," said a Djiboutian military official, on condition of anonymity.
Djiboutian state media said the Red Sea state had captured 100 Eritrean prisoners.
There was, however, no independent verification of events from the remote border area that has long been a source of tension between the two countries.
Without confirming or denying the clashes, Eritrea has dismissed Djibouti's versions as "concocted animosity."
"The Eritrean government ... will under no circumstance get involved in an invitation of squabbles and acts of hostility designed to undermine good neighbourliness," it said.
The clashes erupted on Tuesday after a nearly two-month face off along their frontier. Djibouti accuses Asmara of entering its territory to build defences.
"The Republic of Djibouti will valiantly defend its territorial integrity by all means," said Djiboutian President Ismail Omar Guelleh as he visited wounded soldiers on Thursday at a military hospital.
Eritrea denies aggression.
"It's a fabrication...We decline the invitation to go into another crisis in the region," President Isaias Afwerki told Reuters when accusations of an incursion surfaced last month.
Djibouti's smaller army of 11,000 troops has begun to call up demobilised soldiers and retired policemen.
Eritrea has 200,000 soldiers, but many are on its border with neighbour and foe Ethiopia.
Addis Ababa and Asmara fought a 1998-2000 over their frontier, and tensions between the two nations remain high.
The fighting along the Djibouti-Eritrea border broke out in the Mount Gabla area, also known as Ras Doumeira, which straddles the Bab al-Mandib straits.
Djibouti is home to a U.S. and a French military base.
And Paris signed a mutual defence treaty with Djibouti after that nation's independence in 1977.
It is also an important route for landlocked Ethiopia, which has vowed to protect its access to Djibouti.
The United States and Ethiopia, Washington's main ally in the region, blamed Eritrea for the clashes.
"These hostilities represent an additional threat to peace and security in the already volatile Horn of Africa," State Department spokesman Gonzalo Gallegos said on Wednesday.
Djibouti says the fighting began after Eritrean soldiers fired on some deserters, prompting Djibouti to return fire.
Analysts say Eritrean-Ethiopian hostility is fuelling the spat.
"The Red Sea is a vital oil and petrochemicals route and Djibouti, Ethiopia's main marine outlet, is fast becoming a regional trans-shipment hub," UK-based newsletter Africa Confidential said in a recent analysis of the issue.
"Asmara wants to disrupt this and wean Djibouti of its Ethiopian links."
(For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/ )
(Editing by Andrew Cawthorne)