Abiy Ahmed cut the ribbon on a mega-highway linking south Ethiopia with Kenya's Indian Ocean port of Mombasa, alongside Kenyan counterpart President Uhuru Kenyatta, on Wednesday.

The infrastructure is seen as reflecting Ethiopian aspirations to become a regional African powerhouse.

"We should work on peace and security," Abiy said at the border town of Moyale, refraining from mentioning Tigray.

"Peace is a foundation for everything we are aspiring to transform in the life our people."

War since November 4 between Ethiopia's federal forces and the Tigray People's Liberation Front (TPLF) is thought to have killed thousands and displaced more than 950,000 people, according to UN estimates.

Some 50,000 have fled into Sudan.

The United Nations agreed a deal with the government last week for safe access to Tigray, home to more than 5 million people, of whom 600,000 needed food aid even before the war.

But the shooting at, and then detention of, a UN security team on its way to a refugee camp by Ethiopian federal forces on Sunday highlighted difficulties implementing that deal.

The government said the UN team had defied two checkpoints.

Secretary-General Antonio Guterres acknowledged the problems and said Ethiopia and the United Nations had now agreed on joint missions to assess humanitarian needs.

He said the aim was "to make sure there is full access to the whole of the territory and full capacity to start a humanitarian operation based on real needs and without any kind of discrimination".

The conflict may also hurt an economy that had been soaring, albeit from a low base, becoming the world's fastest growing in 2017, driven by agricultural exports and heavy infrastructure spending it hoped would drive a manufacturing boom.

Ethiopia was for years trying to position itself as an emerging industrial hub that would draw its 115 million population - the second largest in Africa - off subsistence farms and into factories.

For more than a decade, the government poured billions of dollars into hydro-electric dams, industrial parks, railways and highways.

Then when Abiy took power in 2018, he began opening up sectors like telecoms to private investment.

Those aspirations are now at risk.

Instability that began even before the Tigray conflict - due to ethnic clashes and other problems - may scare off investors already skittish about the impact of COVID-19 and rapidly-rising Ethiopian government debt.

Australian Associated Press