For ten years after the Ogaden War, the Siad Barre government refused to renounce its public support of the Ethiopian guerrilla organization, the Western Somali Liberation Front, and provided it with clandestine military assistance to carry out raids inside Ethiopia. The Mengistu government responded in kind by providing bases, sanctuary, and military assistance to the SSDF and the SNM. Siad Barre's fear of Ethiopian military power induced him in the early 1980s to begin a process of rapprochement with Somalia's other neighbors, Kenya and the former French territory of Djibouti. Kenya had long suspected Somalia of encouraging separatist activities among the predominantly ethnic Somali population in its Northern Frontier District. Following a 1981 summit meeting with Kenyan president Daniel arap Moi in Nairobi, Siad Barre's public renunciation of any Somali territorial claims on Kenya helped dissipate mistrust.

Beginning in 1982, both Kenya and Djibouti, apparently encouraged by Siad Barre's stated willingness to hold direct talks with Mengistu, made diplomatic efforts to mediate between Somalia and Ethiopia. It was not until 1986, however, that Siad Barre and Mengistu finally agreed to meet. This first meeting since before the Ogaden War took place in the city of Djibouti and marked the beginning of a gradual rapprochement. Siad Barre's willingness to defuse the situation along the Somali-Ethiopian border stemmed from the combined pressures of escalating guerrilla activity, overt Ethiopian military threats, drought, and the destabilizing presence of hundreds of thousands of Ethiopian refugees. Siad Barre and Mengistu held a second meeting in April 1988, at which they signed a peace agreement and formally reestablished diplomatic relations. Both leaders agreed to withdraw their troops from their mutual borders and to cease support for armed dissident groups trying to overthrow the respective governments in Addis Ababa and Mogadishu.

The peace accord failed to provide Siad Barre respite from guerrilla activity and probably contributed to his eventual demise. Anticipating the possibility of being expelled from Ethiopia, the SNM decided to relocate within Somalia itself, a decision that drastically changed the nature of the conflict in the north. Despite the termination of Ethiopian assistance, SNM guerrillas continued to defeat Siad Barre's forces with relative ease by August 1988 they had captured Hargeysa and other northern towns. Siad Barre responded by ordering massive aerial bombing, carried out by foreign mercenary pilots, that damaged or destroyed virtually every building in Hargeysa (see Sources of Opposition , ch. 5). The brutal attack, which resulted in thousands of civilian casualties and brought both domestic and international opprobrium upon the Siad Barre regime, failed to crush the SNM. Fighting not only intensified in the north over the next eighteen months, but also spread throughout the country, forcing an estimated 800,000 Somalis to seek refuge in Ethiopia.

In March 1990, e41 , Siad Barre accused Ethiopia of having violated the 1988 peace agreement by providing continued military support to the SNM. However, by this time the Mengistu government was as beleaguered as the Siad Barre regime by armed opposition movements and was not in a position to assist any Somali rebels. Soon after Siad Barre fled Mogadishu in January 1991, Mengistu followed his example by fleeing Addis Ababa as guerrilla armies closed upon the Ethiopian capital. Throughout 1991 the new provisional governments in Somalia and Ethiopia regarded each other cautiously. Both were threatened by separatist movements and both had an interest in maintaining the integrity of internationally recognized borders. As conditions in Somalia worsened on account of civil strife, the collapse of central authority, and the disruption of food production and distribution, tens of thousands of Somalis fled to Ethiopia, creating a massive refugee situation in that country by early 1992.

Sharing land borders with both Somalia and Ethiopia, Djibouti believed it was in the long-term interests of the Horn of Africa region if both countries remained intact. Djibouti's president, Hassan Gouled Aptidon, attempted to mediate between the provisional government and the SNM and offered his capital as a neutral meeting place. In June 1991, Djibouti served as the venue for a national reconciliation conference between the USC and several other groups.

With most of Djibouti's diverse population consisting of ethnic Somalis, Aptidon's concern about Somalia's future was not entirely altruistic. The Somalis of Djibouti belonged overwhelmingly to the Iise clan, traditional rival of the Isaaqs who dominated the SNM. The Djibouti Iise tended to be suspicious of the Isaaq, believing that they discriminated against their Iise kinsmen in northern Somalia. This concern had prompted Djibouti in 1990 to assist in the formation and training of a separate Iise movement that challenged the SNM before and after the overthrow of Siad Barre. From Djibouti's perspective, a united Somalia composed of many clans afforded more protection to the Iise than a northern republic controlled by Isaaq.

Kenya was concerned about the situation in southern Somalia, which continued to be unstable throughout 1991. Somali refugees, both civilian and military, had crossed the border into northern Kenya to escape the fighting. The refugees included more than fifty close associates of Siad Barre who were granted political asylum. Since the provisional government had announced its intention to try these officials, this action had the potential to provoke political problems between Kenya and Somalia. By early 1992, tens of thousands of Somalis were being sheltered in makeshift refugee camps in northern Kenya.