The United Nations is preparing to slap sanctions on Eritrea for backing Islamist rebels in war-torn Somalia and threatening neighboring Djibouti, diplomats said.

A draft resolution, seen by AFP, was circulated on Wednesday by Uganda, part of a six-nation east African regional bloc that has been calling for months for sanctions to be imposed.

There will be no vote on the proposal before December to give time for experts and ambassadors from the 15 members of the UN Security Council to debate the move, diplomats said on Thursday.

The draft foresees a ban on weapons sales both into and out of Eritrea as well as freezing the funds of the "Eritrean political and military leadership" and restricting its foreign travel.

It proposes creating a committee to identify which people should face sanctions and to provide progress reports to the Security Council.

The draft resolution also called on Eritrea to withdraw troops immediately from disputed territories along its border with Djibouti.

The long-running border row over the Ras Doumeira promontory on the shores of the Red Sea flared up in June 2008 after previous clashes in 1996 and 1999.

It has assumed a greater strategic significance because both France and the United States have bases in Djibouti, a former French colony.

The United States has more than 1,200 troops stationed in Djibouti, which hosts an anti-terrorism task force in the Horn of Africa.

A UN resolution adopted in January gave Eritrea, which is also involved in a bitter border dispute with larger neighbor Ethiopia, five weeks to pull out.

Both the pan-continental African Union and the east African Inter-governmental Authority for Development (IGAD) bloc have been calling since July for UN sanctions against Eritrea for backing the Somali rebels.

IGAD groups six Horn of Africa countries: Djibouti, Ethiopia, Kenya, Somalia, Sudan and Uganda.

US Secretary of State Hillary Clinton issued a stern warning to Eritrea during an August tour of Africa, threatening "action" if it did not halt its support for the Islamist Shebab rebels in Somalia.