ADDIS ABABA (BLOOMBERG) - Ethiopia prepared for a second day of clashes in the restive Tigray region as the United Nations and the United States urged the two sides to step back from a conflict that risks erupting into a full-blown civil war.

The military engaged with forces loyal to the Tigray People's Liberation Front (TPLF) in three areas on Wednesday and more operations are planned in the coming days, Prime Minister Abiy Ahmed said in a televised address.

The Ethiopian Human Rights Commission (EHRC) urged lawmakers who are meeting Thursday (Nov 5) to approve a state of emergency in Tigray to ensure humanitarian access to the region.

"The commission is gravely concerned and closely monitoring the fast-developing security situation in Tigray and other parts of the country," it said in a statement. "EHRC urges both federal and regional security forces to ensure the safety and security of civilians."

There was no immediate word on the number of casualties in the conflict, which erupted on Wednesday after Mr Abiy accused the TPLF of orchestrating a raid on a federal army camp. Relations between the national and regional governments have deteriorated since Mr Abiy took office in 2018 and sidelined the TPLF, once the pre-eminent power broker in Ethiopia.

The fighting has unnerved investors. Yields on Ethiopia's Eurobonds due 2024 jumped 64 basis points to 6.89 per cent in London on Wednesday, the biggest increase in six months.

United Nations Secretary-General Antonio Guterres and the US urged both sides to de-escalate tensions.

"We are saddened by the tragic loss of life and urge immediate action to restore the peace," the State Department said in a statement on its website.