The second round of peace negotiations between Addis Ababa and the OLA, a rebel group from Ethiopia's restive Oromia region, failed to reach an outcome despite the support of IGAD and international partners.
Both sides accused each other of obstructing progress at the unsuccessful talks hosted in Tanzania aimed at ending a bloody five-year insurgency marked by ethnic massacres of civilians.
IGAD's executive secretary Workneh Gebeyehu appealed to the parties "to uphold their commitment to the peace process in the best interest of the people of Ethiopia".
"Dr Workneh is optimistic that the two sides will initiate a new round of talks to address and resolve the remaining issues," IGAD said in a statement.
"IGAD will continue to remain seized of the situation and stands ready to provide unwavering support to both sides in their pursuit of a peaceful resolution to the situation."
Prime Minister Abiy Ahmed's government and OLA representatives held an opening round of talks in April and May also in Tanzania.
Abiy's national security adviser Redwan Hussein accused the rebels of sinking the latest talks with "intransigence" and "unrealistic demands".
A spokesman for the OLA said Addis Ababa was not interested in addressing obstacles to long-term peace and security in Ethiopia.
Classified as a "terrorist organisation" by Addis Ababa, the OLA has been fighting the government since 2018 after splitting from the Oromo Liberation Front (OLF) when it renounced armed struggle.
Since breaking off, a string of armed groups have risen up in Oromia claiming to be part of its cause, although they are only loosely tied.
The OLA's strength, estimated at a few thousand men in 2018, has increased in recent years, though observers believe it is insufficiently organised or well-armed to pose a real threat to the government.
The OLA has been accused by Abiy's government of orchestrating massacres, something the rebels deny. The government in turn is accused of waging an indiscriminate crackdown that has fuelled Oromo resentment.
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