(Adds background) By Tsegaye Tadesse ADDIS ABABA, Nov 25 (Reuters) - Ethiopia said on Saturday it would "respond with force" if necessary to Islamists in neighbouring Somalia who have declared holy war against it, despite Western pressure for dialogue. The Islamists have declared jihad against Ethiopia, accusing it of sending troops into Somalia to prop up Somalia's Addis Ababa-backed interim government. Meles told a news conference on Saturday he had explained Ethiopia's position to Western powers since the Islamists seized Mogadishu in June. "Both Brussels and Washington appear to believe that any military response on our part might be counter-productive, saying that dialogue is the best way forward," he said. "We too agree that dialogue is the best way, nevertheless as the direct victims of the aggression, we feel we might be forced at some stage to respond with force. "It is our country that is being attacked. Naturally, we do not seek any light, green, red or yellow from anyone to protect ourselves. "If, and when, we are convinced that all options of resolving the invasion through peaceful means are exhausted, only then we may act to respond in kind," he said, adding the Islamists had trained, armed and smuggled hundreds of Ethiopian rebels into Ethiopia. MILITARY INCURSIONS Ethiopia in the past sent troops into Somalia to fight Islamist radicals, fearing they could stir up trouble in ethnic Somali regions on its side of the border. Senior Somali Islamist Sheikh Sharif Ahmed has accused Washington of giving Ethiopia the go-ahead to fight his movement. Meles was speaking two days after appearing in parliament to urge lawmakers to back plans to fight the Somali Islamists, although he has refrained from declaring war on them. Ethiopia insists it has only sent a few hundred military trainers across the border, but a U.N.-commissioned report says it has deployed thousands of soldiers and weapons in Somalia. In Mogadishu, senior Islamists and visiting parliamentary speaker Sharif Hassan Sheikh Adan on Saturday condemned the parliamentary address by Meles as "naked aggression". The group also issued a 10-point communique which called for the Islamists and the interim government to resume talks in Sudan's capital Khartoum next month. Talks between the two sides collapsed in October, with the Islamists saying they would not negotiate unless Ethiopian troops withdrew from Somalia. Interim government Deputy Defence Minister Salad Ali Gele said the Islamists had to drop their demands before the government would return to the negotiating table. (Additional reporting by Sahal Abdulle in Mogadishu)