The United States is considering putting Eritrea on its list of state sponsors of terrorism, which would impose some sanctions, for allowing arms to flow into Somalia, a senior U.S. official said on Friday.

"We are looking into it," U.S. Assistant Secretary of State for African Affairs Jendayi Frazer told reporters.

"Frankly, the information so far that we have collected is fairly convincing about their activities ... in Somalia."

Eritrea is the archrival of Ethiopia, and diplomats say the two have been waging a proxy war in Somalia since last year when Asmara backed a hard-line Islamist movement against the country's fragile government.

Ethiopia sent in troops to support the government and dislodge the Islamists from Mogadishu.

According to a U.N. report released on July 26, large quantities of weapons -- including surface-to-air missiles -- are reaching Islamic insurgents in Somalia from Eritrea. Eritrea has denied sending the weapons.

Frazer said the United States had intelligence that substantiated the U.N. report.

She stressed that the United States did not wish to place Eritrea on the state sponsors of terrorism list and suggested Asmara now had a chance to stop Washington from taking the step by changing its behavior toward Somalia.

"We are not looking to go down this route but if they continue their behavior and we put together the file that's necessary, I think it would be fairly convincing," Frazer said.