During a Sunday interview, President Farole told the BBC Somali Service that Puntland's government "will not remain on the sidelines" if Somaliland continues the violence.
"We [Puntland] wish to live in this region peacefully. We wish that the two stable states of Somalia [Puntland and Somaliland] co-exist in peace and we hoped that a new administration in Somaliland would withdraw its forces from Las Anod," President Farole said, adding: "But if the situation is now at a point where our citizens are being massacred and Somaliland wants to seize Buhodle, then Somaliland must take responsibility for initiating this war."
He blamed Somaliland President Ahmed Mohamed Silanyo for the violence, saying that Silanyo's words "encouraged clan hostilities." Furthermore, President Farole said a dialogue process mediated by the regional bloc IGAD between Puntland and Somaliland was now in question, due to Somaliland's "war of aggression" against civilians.
President Farole's strong words to Somaliland come after day-long battles erupted along three villages in Buhodle district, where local clans have been fighting against Somaliland's violent aggression.
Upwards of 50 people were killed on both sides, with local sources confirming that local clan fighters remain in control of all three villages where the fighting took place.
Somaliland troops retreated from the battle zones, the reports added.
Sunday's fighting comes two weeks after Somaliland troops attempted to seize Buhodle district, but were repulsed by local clans.
Somaliland: Supporting terrorism
Puntland government forces are not directly involved in the fighting, but President Farole's warning let much room for speculation that Puntland might soon join the war.
"This is a continuation of Somaliland massacring our civilians. We condemn this and we will defend our civilians strongly," Puntland's leader said.
He went on to condemn Somaliland's "land expansion" and "baseless claims of ownership" over Sool and Sanaag regions, saying: "Supporting terrorists in Golis mountains [of Sanaag region] or massacring civilians in Buhodle [district] will not get Somaliland international recognition."
Somaliland has been accused of funding, arming and providing safe havens for Al Shabaab terrorists fleeing Galgala hills after losing a three-month war against Puntland troops. More than 96 Al Shabaab fighters were killed during the military offensive.
Reports say the Al Shabaab leader in Galgala, Mr. Mohamed Said Atom, resides in Burao, a major town controlled by Somaliland.
President Farole stated that Somalia's collapse in 1991, the country disintegrated and the clans regained control over their own territories.
"Land ownership is divided among the clans. If the issue is a farm, then each man owns his farm. But if the issue is land, then each clan owns its land," President Farole said.
There are two fighting forces in the Buhodle conflict. On one side, there is the Somaliland army dominated by Isaaq clan of Hargeisa area.
On the other side, there is the Dhulbahante clan of Puntland defending its territory from Somaliland's land expansion and separatist policy.
But Somaliland's leadership claims ownership over Dhulbahante clan territory based on defunct colonial-era boundaries drawn up by long-departed British colonialists, while Puntland claims ownership based on kinship, which existed centuries before the advent of European colonialism in Africa.
President Farole said the people of Puntland and Somaliland have "normal business relations," but stressed that the "solution lies in Somaliland stopping the war of aggression [against Buhodle] and Somaliland withdrawing forces from Las Anod."
Somaliland 'victim card'
Furthermore, Somaliland's separatist rulers have declared independence from the rest of Somalia in 1991 with no international recognition to-date, but non-Isaaq clans who live in northwestern Somalia do not want to join a separatist Somaliland.
President Farole of Puntland told the BBC: "Those who blame the former military regime [of Gen. Siyad Barre] for civilian massacres are today committing civilian massacres themselves. As we all know, those people are even pursuing court cases as far as the U.S.A. against former Barre officials namely Gen. Mohamed Ali Samatar."
The aging Gen. Samatar, who resides in Virginia, was a former senior official during Barre's 21-year military dictatorship, which collapsed with the eruption of the Somali civil war in 1991.
Gen. Samatar's accusers belong to the Isaaq clan that has pursued similar court cases against former Barre regime officials.
Puntland and Somaliland, located in northern Somalia, have been largely stable since 1991. But the two sub-states are ideologically opposed, with Puntland supporting a united Somalia under federal system and Somaliland rejecting to be part of a united Somalia.
Southern Somalia, including Mogadishu, has been crippled by chronic armed conflict since 1991, with an anti-government insurgency raging in Mogadishu since early 2007.