Ethiopia says its soldiers have seized three towns in the northern Tigray region from forces it has been fighting in the 23-month civil war.
It has promised to take “maximum care” to protect civilians from harm.
The news comes as diplomats grow increasingly worried about the impact of the war on citizens.
The loss of the strategic city of Shire, with its airport and road links to the regional capital, comes as a significant blow to Tigrayan forces.
Alamata and Korem are the two other towns now claimed by Ethiopian federal troops.
This is the latest escalation in the conflict with the Ethiopian government, whose troops are being bolstered by Eritrean allies.
Ethiopia on Tuesday promised to work with humanitarian agencies to bring vital aid to all parts of Tigray now under its control, but many analysts are sceptical because similar promises have been made and broken in the past.
Most of Tigray has been under a virtual blockade by the federal government since June 2021, when Tigrayan forces recaptured much of the region.
Shire is one of Tigray’s biggest cities with some 100,000 residents.
Reporters on the ground in the regional capital, Mekelle, say there was a mix of anger and shock over the news of the loss of Shire.
Residents are glued to radio sets and discussing the information on street corners, while others are preparing food to support the Tigrayan Defence 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”.
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.