Ethiopia declared a "unilateral ceasefire" in Tigray on Monday, as rebels claimed retaking the regional capital of Mekelle.
In a statement, Addis Ababa said it was pausing hostilities to prevent disruptions to the farming season and to allow the distribution of humanitarian aid.
The United Nations has called for an emergency meeting of the United Nations Security Council to discuss the situation in the country.
UN Secretary General Antonio Guterres considered these events "extremely worrying". "They demonstrate, once again, that there is no military solution to the crisis," he said, saying he was "confident that an effective cessation of hostilities will take place.
The United States, Ireland and the United Kingdom on Monday called for an emergency public meeting of the U.N. Security Council on Tigray, diplomatic sources said, adding that it could be held Friday.
Mekelle fell to the federal army on November 28, three weeks after Ethiopian Prime Minister Abiy Ahmed launched an offensive after the region's forces attacked and killed federal troops.
Despite the victory proclaimed after the fall of Mekelle, the fighting never stopped between the pro-Tigray Peoples Liberation Front forces - and the federal Ethiopian army.
The rebels launched an offensive last week, just as much of the rest of the country was holding highly anticipated national elections, the results of which have not yet been announced.
Music and fireworks
On Monday, these rebels "took control of the city, I saw them myself, they entered," a member of the interim regional administration, set up by Addis Ababa after the removal of the TPLF authorities, told AFP.
An AFP reporter confirmed that the troops had arrived in trucks and cars.
Their entry triggered scenes of jubilation, with soldiers firing into the air in celebration, and residents coming out into the street waving the Tigrayan flag.
"The city is celebrating, everyone is out dancing," confirmed the interim administration member.
"Everyone is excited, there is music in the streets. Everyone has their flags out and the music is playing. I don't know how they got them, but everyone has fireworks," detailed one resident, reached by AFP.
Faced with the rebel advance, officials from the regional interim administration left the town on Monday, according to the administration official.
Witnesses reported that soldiers and federal police were also fleeing Mekele, some looting banks and commandeering private vehicles.
Abuses and starvation
Tigray, the northernmost region of Ethiopia and bordering Eritrea, has been in the grip of a destructive conflict for nearly eight months.
Although it was announced as being brief, the military operation launched by Abiy has turned into a long-lasting conflict, marked by numerous accounts of abuses against civilians including massacres, and rapes.
On June 22, an Ethiopian army air strike hit a busy market in Togoga, about 30 kilometers from Mekele, killing at least 64 people and injuring 180.
The Ethiopian army said it targeted pro-TPLF forces dressed in civilian clothes in this "operation," calling it "unacceptable" to say civilians were targeted.
The nearly eight months of fighting have left at least 350,000 people in the region facing starvation.