By Jeremy Clarke

PhotoASMARA (Reuters) - The U.N. children's agency UNICEF is appealing for $24.8 million to expand its programmes in Eritrea, where aid agencies say drought is causing widespread food shortages and child malnutrition.

UNICEF says it will help more than 1 million Eritreans in 2010 -- approximately a quarter of the population -- with supplementary and therapeutic feeding to "prevent further deterioration in their already poor nutrition status".

Some $13 million is earmarked for nutrition, UNICEF said in its 2010 humanitarian action report, adding that in some regions nearly 17 percent of children were suffering acute malnutrition.

East Africa is facing a devastating drought. Aid agencies estimate 23 million are in danger, with 13.7 million in neighbouring Ethiopia at risk of severe hunger.

Poor rainfall has hurt Eritrea's agriculture-based economy, say aid agencies, who rank hunger levels in the country among the worst in the world.

The United Nations Food and Agriculture Organisation estimates as many as two in every three Eritreans are malnourished, the second-highest percentage in the world after the war-ravaged Democratic Republic of Congo.

Asmara denies there is any widespread hunger or food shortages in the country and places restrictions on the work of humanitarian organisations.

In a recent interview with Eritrean media, President Isaias Afwerki said hunger was "non-existent". Late last year he pledged "no hunger in 2010".

Asmara accuses humanitarian organisations of trying to tarnish Eritrea's image by inventing statistics.