Oromia demonstrations broke out after assassination of well-known singer Haacaaluu Hundeessaa.
The military has been deployed in the Ethiopian capital on Wednesday as violence broke out in some neighbourhoods in a second day of unrest that claimed more than 80 lives.
Popular musician Haacaaluu Hundeessaa was shot dead on Monday in what police said was a targeted killing.
Protests following the killing - spurred by a building sense of political marginalisation - broke out the next morning in the capital and other towns in the surrounding Oromia region.
The assassination of Haacaaluu, a member of the country's largest Oromo ethnic group, stoked tensions that threaten to derail the country's democratic transition.
"So far, 81 people have been killed, including three Oromia special police force members," said Bedassa Merdasa, the Oromia police chief.
Gunshots echoed through many neighbourhoods and gangs armed with machetes and sticks roamed the streets. Witnesses described a situation pitting youths of Oromo origin against some of the city's other ethnic groups, and where both sides skirmished with police.
"We had a meeting with the community, and we were told to arm ourselves with anything we have, including machetes and sticks. We no longer trust the police to protect us, so we have to prepare ourselves," said one Addis Ababa resident - who, like others interviewed, asked not to be named for fear of reprisal.
The military had been deployed in some areas, three witnesses said. One described a street littered with rocks that anti-Oromo protesters had thrown at police.
Many residents feared Haacaaluu's funeral - scheduled for Thursday in his home town of Ambo - could ignite more violence.
"Security forces have invaded our town, we can't go out to mourn. No vehicles are moving around except security patrols with machine-guns," Chala Hunde, 27, said from Ambo, 100km (60 miles) west of Addis Ababa.
"The security forces are putting a finger in our wound."
A tussle over whether to bury Haacaaluu in Ambo or Addis Ababa laid bare the political tensions fanning the protests, said Professor Awol Allo at Britain's Keele University.
"It's very contentious. Oromos claim the city [Addis Ababa] to be theirs as it lies fully within the Oromo regional state," he said. But the capital is under federal, not regional control.
The state broadcaster reported the arrest of prominent journalist and activist Eskinder Nega, a former political prisoner who runs a pressure group opposed to what it describes as Oromo attempts to dominate the capital.
A policeman was also killed in Addis Ababa, and three explosions there caused an unspecified number of deaths.
Prominent Oromo opposition leader Bekele Gerba and media mogul Jawar Mohammed, along with 34 other people, were also arrested when Jawar's bodyguards refused to disarm during a standoff with police.
Haacaaluu provided a soundtrack to a generation of young protesters.
Their three years of bloody street demonstrations forced the unprecedented resignation of the previous prime minister and the appointment of Abiy Ahmed in 2018.
Abiy, Haacaaluu and Jawar are all Oromo, Ethiopia's largest ethnic group, which has long complained of being excluded from power.
Jawar was a prominent supporter of Abiy's appointment but became more openly critical last year. Jawar's popular Oromia Media Network gives him the ability to mobilise support quickly across Oromia and his power base could pose a significant challenge to Abiy's party in next year's elections.
Ethiopia, an ethnic melting pot of 100 million people, has battled deadly intercommunal tensions in recent years, a major threat to efforts by Abiy to bring about democratic reforms in a country long ruled with an iron fist from Addis Ababa.
"The assassination of an important Oromo musician, subsequent protests which have in places involved property destruction and security forces using lethal force, and the arrest of Oromo leaders, creates a dangerous situation and is another blow to Ethiopia's troubled transition," said William Davison, an analyst with the International Crisis Group.
Source: Al Jazeera and News Agencies