The Ethiopian military began search operations on buses and trucks passing in that area.
The reason for the border crossing is unknown. It comes as only a small number of militants remained in the town after most of them deserted Belet-weyne town last week for unknown reasons.
The Transitional Federal Government of Somalia did not immediately comment on the incursion.
Forces from Ethiopia repeatedly cross into southern and central Somalia because they fear Islamists whose numbers are growing, experts said.
Late in 2006, a large number of Ethiopian troops endorsing the former leader of the Somali Transitional Federal Government, Abdullahi Yusuf Ahmed, invaded Somalia and managed to dislodge the Union of Islamic Courts that ruled much of southern and central Somalia.
During the invasion, more than 20,000 people died and 1.5 million were displaced.