The escalating violence sparked renewed calls for the two sides to start talks on ways to end two weeks of fighting, which the United Nations warned risks spiraling out of control. Concerns about the damage the dispute might inflict on one of Africa’s fastest-growing economies has resulted in a sell-off of Ethiopian Eurobonds for nine straight days.

An ultimatum demanding that troops loyal to Tigray’s ruling party surrender to federal forces expired on Tuesday, Abiy said in a statement.

“Since the deadline ended, we will take the final and crucial law-enforcement actions in the coming days,” he said.

Why Ethiopia’s Tensions Are Boiling Over in Tigray: QuickTake

Hundreds of people have died and thousands have been displaced since Ethiopian soldiers began attacking Tigray on Nov. 4 after Abiy blamed the region’s government for an attack on a federal army base. Relations between Tigray and Abiy’s administration have been strained since he took office in 2018 and began consolidating power and sidelining the TPLF, which controlled the nation’s ruling coalition for two decades.

Opening Economy

The conflict has raised international concern of a full-blown civil war, at a time when the government is struggling to end ethnic violence that’s shaken Africa’s second-most populous nation. It may also delay plans to open up the economy to foreign investors and sell stakes in state companies.

Vodacom Ltd., South Africa’s biggest wireless carrier, said Monday it’s monitoring the crisis in Ethiopia before a planned investment decision. KCB Group, Kenya’s largest bank, said last week it’s postponed plans to expand into the northern neighbor.

Yields on the nation’s $1 billion of Eurobonds maturing in 2024 have risen 180 basis points since the conflict erupted. The yield traded at 8.05% in London on Tuesday, compared with 6.25% on Nov. 3.

Abiy’s government continued to rebuff calls for talks, after Ugandan President Yoweri Museveni on Monday urged the warring sides to negotiate. Former Nigerian President Olusegun Obasanjo, who has previously helped mediate political crises in West Africa, traveled to Ethiopia on Monday.

‘Give Us Time’

“We appreciate concern from both near and far,” but now is not the time to negotiate, Redwan Hussein, state minister of foreign affairs and spokesman for the government’s Emergency Task Force, told reporters in Ethiopia’s capital of Addis Ababa. “We are saying ‘give us time.’”

The conflict has spawned a humanitarian crisis in the region. Even before the latest spate of violence there were 96,000 refugees and 100,000 internally displaced people in Tigray, according to the UN. At least 20,000 people have crossed into neighboring Sudan since the fighting began, it said on Sunday.

Tigrayan President Debretsion Gebremichael on Tuesday reiterated his claim that the region is being attacked by Eritrea, which he said is deploying drones from a base in the port town of Assab. Eritrean Information Minister Yemane Gebremeskel didn’t answer calls seeking comment.

Debretsion also said that clashes have escalated around Alamata, about 180 kilometers (112 miles) south of the Tigrayan capital, Mekele. Two foreign diplomats confirmed that heavy fighting is taking place around the town, which Ethiopia’s government claimed on Sunday it had captured.

“Fighting is still continuing on all fronts,” Debretsion said.