Mursi turns up heat in battle against Ethiopian dam on Nile

Egypt did not want war with Ethiopia but would keep "all options open", President Mohammed Mursi said, turning up the heat in a dispute over a giant dam Addis Ababa is building across the Nile.

In a televised speech on Monday to cheering Islamist supporters, Mursi voiced understanding for the development needs of poorer nations upstream in the Nile basin, but rammed home in emotive language that Egyptians would not accept any reduction in the flow of the river on which their civilisation has been based for thousands of years.

Bellicose rhetoric, including talk of military action by Egyptian politicians last week, had raised concerns of a "water war" between Africa's second and third most populous states.

But Mursi, for whom the dispute is a chance to rally Egyptians behind him after a divisive first year in power, also appeared to leave room for compromise.

He did not renew an Egyptian call - flatly rejected by Ethiopia last week - for work to stop at the dam but said further study on its impact was needed.