The killings on Saturday in the town of Woldiya, 500 kilometres north of the capital Addis Ababa, happened on the second day of the colorful Epiphany celebrations in this East African nation.
Amare Goshu, a police official in the region, told the state-owned Ethiopian Broadcasting Corporation that seven people died, including one security officer, during the confrontation.
He said that the security forces responded with force when youths in the town tried to attack officers who were patrolling the holiday procession areas.