Tigrayan forces have admitted that Ethiopian troops have taken control of the strategic city of Shire.
The news comes as diplomats grow increasingly worried about the civilian impact of the 23-month civil war.
With an airport, and being a staging post to the regional capital, the loss of Shire is a significant blow.
This is the latest escalation in the conflict with the Ethiopian government, whose troops are being bolstered by Eritrean allies.
Shire is one of Tigray’s biggest cities with some 100,000 residents — and is a key target because its air and road connections.
Reporters on the ground in the regional capital, Mekelle, say there was a mix of anger and shock over the news.
Residents are glued to radio sets and discussing the information on street corners, while others are preparing food to support the Tigrayan Defense Forces and also stocking up for themselves as a precaution.
One woman said “we will not give up defending ourselves from those who are coming to humiliate us”. Another feared for her sister living in Shire, saying “they [the federal forces] will kill her”.
On Monday, the Ethiopian government said it intended to capture all airports in Tigray, but on Tuesday there was no official comment on developments in Shire — nor on reports that government forces have also advanced in towns in southern Tigray.
Thousands of residents are already leaving Shire, despite the Tigray People’s Liberation Front (TPLF) insisting that the loss of control to federal troops is only temporary.
Many of the people leaving had previously been forced to flee their homes in other parts of Tigray, and had come to Shire where they were living in makeshift camps in schools and university campuses.
The TPLF say they are locked in a “life and death struggle” and call on all Tigrayans to keep fighting, but have also sought to play down developments saying “during war movement out of areas is natural”.
The war has left a humanitarian disaster in its wake.
The UN says that currently 5.4 million people — around three-quarters of Tigray’s population — need some kind of food aid as the fighting has disrupted supplies.
UN Secretary General António Guterres said on Monday that the situation in Tigray was “spiraling out of control” and hostilities must end immediately, and the African Union has called for the same.
But the violence shows no sign of ending and attempts to start peace negotiations — though welcomed by both sides — have not yet borne fruit.
Diplomats have been warning of a civilian bloodbath if more TPLF forces are pushed out of other towns and cities.
Within less than 100km (62 miles) from Shire are two other major cities — the historic Axum and Adwa.
Emboldened by its gains, the federal government could head for Axum and Adwa, which would then give them access to the main highway leading to Mekelle.
In August, Prime Minister Abiy Ahmed alleged that planes carrying weapons were landing at night in Shire — presumably to support Tigrayan forces. Abiy did not specify where the flights were coming from.
In a statement on Monday the government’s communication office accused Tigrayan forces of colluding with unnamed “hostile” foreign actors in violating Ethiopia’s airspace as a justification for the decision to control airports.
Fighting started in November 2020 when federal Ethiopian forces tried to wrest control of the region from the TPLF. An effective blockade began when the TPLF mounted a counter-offensive and recaptured much of Tigray in June 2021.