The US has called an agreement between the Ethiopian government and rebel Tigray forces to cease hostilities a "momentous step".
The agreement was announced by an African Union envoy following peace talks in South Africa.
Secretary of State Antony Blinken said he hoped it would mean an end to the two-year conflict. He said the US was open to improving relations with Ethiopia.
"We welcome the momentous step taken in Pretoria today to advance the African Union's campaign to 'silence the guns'," he said on Wednesday.
"We welcome the unimpeded delivery of humanitarian assistance and the protection of civilians that should result from implementation of this agreement."
Mr Blinken praised the "extraordinary efforts" of African Union mediators including Nigeria's former president Olusegun Obasanjo, Kenya's former president Uhuru Kenyatta and South Africa, the host of the talks that involved US envoy Mike Hammer.
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