Somalia is discussing a pact that would allow landlocked Ethiopia to use the Red Sea port of Berbera, the state news agency reports.
Somalia's cabinet has called an emergency meeting to discuss a port deal between Ethiopia and the breakaway region of Somaliland.
Somalia's cabinet will meet on Tuesday to discuss the plan, following the signing the previous day of the agreement allowing Ethiopia to use the Red Sea port of Berbera. Tensions are simmering in the Horn of Africa as Ethiopia has increased its offer for access to a seaport.
Ethiopia has been a landlocked country since Eritrea gained independence in 1991. This has left Africa's second most populous country reliant on neighboring Djibouti for the majority of its maritime trade.
But the agreement, signed in Addis Ababa by Ethiopian Prime Minister Abiy Ahmed and Somaliland President Muse Bihi Abdi, will pave the way for Ethiopia to establish commercial naval operations with access to a leased military base on the Red Sea, Abiy's national security adviser said. Redwan Hussien said.
In return, Somaliland would receive a share in Ethiopia's national airline, Redwan said, without providing further details.
Somalia's cabinet will decide on a response at its meeting on Tuesday, the Somali National News Agency (SONNA) reported.
Despite Somalia's declaration of autonomy in 1991, Somaliland has not achieved widespread international recognition. Somalia insists that Somaliland remains part of its territory.
Last week, the news agency said Somalia and Somaliland had agreed to resume talks to resolve their disputes following mediation efforts led by Djibouti.
Abdi said that under the port agreement, Ethiopia will be the first country to recognize Somaliland as an independent nation in due course.
The deal comes months after Abiy said the country should assert its right to access the Red Sea, sparking regional concern.