The annual Irreecha thanksgiving festival of the Oromia people in central Ethiopia was disrupted on Sunday after police fired teargas to disperse protesters in Bishoftu.
Among the thousands of festival participants, a number of them marched chanting anti-government slogans and their arms crossed above their heads which solicited the police reaction.
Some witnesses told Reuters that the police also fired shots into the air causing a stampede which resulted in several casualties.
The government has not yet commented on the incident as at Sunday morning and the number of casualties cannot be readily verified.
Witnesses told Africanews that a helicopter hovered around the festival grounds close to the Lake Harsadi before it dropped teargas on the people while the police on the ground fired the shots.
The Oromia region lies south of the Ethiopian capital Addis Ababa and is the center of the Oromia protests last year which Human Rights Watch reported that over 400 protesters were killed.
The government disputed the figures yet hundreds remained in custody without charges after thousands of students, social media activists, and opposition party leaders and supporters were arrested.
The anti-government protests which continued in other regions including the neighbouring Amhara were held to demand fair distribution of wealth to Oromia and Amhara, which are the poorest in the country.