Fresh clashes have erupted between federal and regional Tigray forces in Ethiopia's Tigray region, fueling fears of renewed instability in the area.

Fighting broke out in recent days in Tsemlet, western Tigray, a contested zone claimed by forces from the neighboring Amhara region. Those forces have remained in the area despite a peace deal signed in 2022 that called for their withdrawal.

The violence has disrupted air travel, with flights suspended amid concerns from diplomatic and security sources that the situation is deteriorating. 

Residents say the impact is already being felt, with long queues forming at banks as people try to withdraw cash for emergencies.

"Many families have been told there are no flights, without any clear explanation, and people are suffering because of the cancellations," according to Mekelle resident Gebremedhin Tesfamichael. 

"People across Tigray, including in Mekelle, are also struggling to access their own savings because of long queues and a withdrawal limit of 2,000 Ethiopian birr ($13)."

The African Union, in a statement on Friday, urged the parties involved to return to dialogue, saying it remains ready to intensify efforts to facilitate talks, cooperation and confidence-building in support of lasting peace and stability in Tigray.

The continental body said it is closely monitoring developments in the region.

Report edited by CGTN Africa's Dinah Matengo