In a surprise move, Addis Ababa recognises conditions of a 2000 agreement that ended a two-year war.
Ethiopia announced it will fully accept the terms of a peace agreement with neighbouring Eritrea in a major step towards calming deadly tensions with its decades-long rival.
The news comes hours after Ethiopia lifted a state of emergency on Tuesday in what had been the most dramatic reform yet under new Prime Minister Abiy Ahmed, who has promised change after more than two years of deadly anti-government protests demanding greater freedoms.
However, it is the prospect of peace with reclusive Eritrea that has come as the latest, and largest, surprise.
The agreement signed in 2000 ended a two-year war.
“The suffering on both sides is unspeakable because the peace process is deadlocked. This must change for the sake of our common good,” Fitsum Arega, the chief of staff for the prime minister’s office, said on Twitter.
“The Eritrean government should take the same stand without any prerequisite, and accept our call to bring back the long-lost peace of the two brother nations as it was before,” the ruling party wrote on Facebook.
Eritrean officials in Ethiopia’s capital, Addis Ababa, could not immediately be reached for comment and Eritrea’s information ministry posted nothing on the development.
Ethiopia became landlocked in 1993 after Eritrea, which comprised the country’s entire Red Sea coast, voted to leave.
But the neighbours were soon at war over the demarcation of their shared border, a conflict that would leave 80,000 people dead and degenerate into a stalemate.
Hundreds would die in subsequent years in periodic border clashes after Ethiopia’s refusal to accept the ruling of an UN-backed boundary commission that divided up contested territory between the two countries.
Tiny Eritrea is one of the world’s most reclusive nations, ruled since 1993 by President Isaias Afwerki.
When the 42-year-old Abiy was installed as Ethiopia’s prime minister in April his inaugural speech mentioned the need for reconciliation with bitter rival Eritrea, raising hopes of peace.
“We are fully committed to reconcile with our Eritrean brothers and sisters and extend an invitation to the Eritrean government to start dialogue and establish rapport,” he said in his address to parliament.
The development on Tuesday night came as the ruling party also announced the East African nation will open parts of state-owned enterprises in sectors such as energy, aviation and telecoms to private investment.
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