Members of the Ethiopian National Defense Force (ENDF) are seen on a truck in Shewa Robit, Ethiopia, on December 05, 2021. AFP
Dessie and Kombolcha lie in the Amhara region on a key highway to Addis Ababa, and their reported capture by the Tigray People's Liberation Force (TPLF) in late October had sparked fears the rebels would be marching on the capital.
"The historic Dessie city and the trade and industry corridor city Kombolcha have been freed by the joint gallant security forces," the government's communications service said on Twitter.
On Wednesday, the government announced that its forces had recaptured the UNESCO World Heritage site of Lalibela, which had fallen to TPLF fighters in August.
The latest territorial gains claimed by Abiy's government mark another sharp shift in the 13-month war in the north of Africa's second most populous nation.
Abiy announced last month that he would be heading to the battleground following a series of reported advances by the rebels, as fighting reportedly raged on at least three fronts.
Since Abiy's declaration, the government has announced the recapture of several small towns, including Lalibela which is famed for its 12th-century rock-hewn churches.
In a statement on Sunday, TPLF leader Debretsion Gebremichael denied the government was scoring major victories, saying the rebels were making strategic territorial adjustments and remained undefeated.
The conflict, which erupted in November 2020, saw a dramatic turnaround at the end of October this year, when the TPLF claimed to have captured Dessie and Kombolcha, which lie about 400 kilometres (250 miles) northeast of the capital.
Since then, speculation of a rebel march on Addis Ababa has prompted countries such as the United States, France, Britain to urge their citizens to leave Ethiopia as soon as possible.
The government has described the gains by the TPLF as overstated and insisted that the capital city of more than five million people is secure.
The war broke out when Abiy, the 2019 Nobel Peace Prize winner, sent troops into Ethiopia's northernmost Tigray region to topple the TPLF.
He said the move was in response to attacks on army camps by the TPLF, and vowed a swift victory.
But the rebels mounted a shock comeback, recapturing most of Tigray by June including the capital Mekele before expanding into the neighbouring regions of Amhara and Afar.
The fighting has killed thousands of people, displaced more than two million and driven hundreds of thousands into famine-like conditions, according to UN estimates.
There have also been reports of massacres and mass rapes by both sides.
But so far, a flurry of diplomatic efforts led by the African Union to try to reach a ceasefire has failed to achieve any breakthrough.
Earlier Monday, the United States and Western allies sounded the alarm over reports the Ethiopian government has unlawfully detained large numbers of citizens on ethnic grounds.
"We... are profoundly concerned by recent reports of the Ethiopian government's detention of large numbers of Ethiopian citizens on the basis of their ethnicity and without charge," said a joint statement issued by the US State Department.
Australia, Canada, Denmark, the Netherlands and Britain joined the United States in urging the Ethiopian government to "cease immediately" the arrests, saying "many of these acts likely constitute violations of international law".
"Individuals are being arrested and detained without charges or a court hearing and are reportedly being held in inhumane conditions."
The statement cited reports by the Ethiopian Human Rights Commission (EHRC) and Amnesty International, which "describe widespread arrests of ethnic Tigrayans," including the elderly and young children.