Ethiopia's military government said yesterday that Somalians have deployed tanks, planes and artillery in southeast Ethiopia and that their troops are occupying "the greater part of Ogaden," the desert area claimed by Somalia.

Fighting continues around the major towns of Harar and Dire Dawa, the official Ethiopian News Agency said in a dispatch to Reuter in London.

UPI quoted the Ethiopians as announcing a major military shake up apparently in connection with the fighting, but there were no further details.

Earlier reports from both countries have spoken of heavy fighting and both sides have claimed successes, but this was the first official Ethiopian acknowledgement that large areas of its territory are occupied.

Diplomats in the Ethiopian capital were quoted on Saturday as saying that Ethiopia appeared to have won the first round in the fighting.

After affirming that the country's regular and militia units "are at this moment putting up a determined and heroic struggle," the Ethiopian government called on the populace to serve as a rear guard against the invading forces.

Radio Mogadishu in Somalia said that fighting in the Ogaden region is escalating daily and claimed that an increasing number of Ethiopian troops have surrendered.

Ethiopia said its troops had scored major victories but warned that "before we gain full victory, much blood must be spilled and many sacrifices must be made."

In addition to accusing Somalia of launching an invasion, the Ethiopians also said "imperialists" - normally a reference to the United States - and "surrounding oil-rich reactionary (Arab) countries" plan to prolong conflicts with Ethiopia, apparently referring both to Ogaden fighting and to Eritrean secessionists.