If confirmed, the fall of the town to the Tigray People's Liberation Front (TPLF) would be a major blow to the federal government, which has been embroiled in a nearly year-long war with the rebels.

"At around 2 am Ethiopian soldiers began retreating from the area," said Amir, a Dessie resident who declined to give his second name.

TPLF fighters "entered the city, with ENDF (Ethiopian National Defence Force) soldiers not seen," said another resident who gave his name only as Mohammed.

"I don't know if the soldiers left or were captured," he told AFP, adding that he was trying to flee the town now.

There was no immediate comment from the TPLF or the government on the situation in Dessie.

Much of northern Ethiopia is under a communications blackout and access for journalists is restricted, making battlefield claims difficult to verify independently.

Dessie, which is located in the Amhara region neighbouring Tigray, lies about 400 kilometres (250 miles) north of the Ethiopian capital Addis Ababa.

Residents had earlier reported a heavy military build-up in the area, as civilians fleeing conflict-hit towns further north poured into Dessie seeking refuge.

The TPLF on October 20 claimed the rebels were "within artillery range" of Dessie, with Amhara regional president Yilkal Kefale the following day urging armed Amharas to converge on the town to defend it.

The conflict erupted last November when Prime Minister Abiy Ahmed deployed troops in Tigray, with the operation spiralling into a prolonged war marked by massacres, mass rapes and a looming threat of famine.

The prime minister, who won the Nobel Peace Prize in 2019, said the operation was in response to attacks on army camps by the TPLF, the regional ruling party which dominated national politics for three decades before Abiy took office.