Addis Ababa (AFP) - Protesters set tyres alight and lobbed stones at security forces on Thursday in the Ethiopian city of Hawassa, where residents are demanding the creation of their own federal state.

The Sidama ethnic group, the largest in the southern region, has been agitating for their own semi-autonomous state, and expectations were high they would declare their own region unilaterally on Thursday.

While one prominent party earlier said it had agreed to delay the formation of the state, not everyone appeared happy with this decision.

An activist for the cause, Mate Mengesha, said security forces had blocked a planned meeting of Sidama elders and youth activists in the morning, where it was hoped officials would declare the formation of the new region.

However the officials never showed, and the activists threw stones at security forces blocking them from the site.

"The expectation was today is July 18 and on July 18 they want to have a declaration," he told AFP. "The meeting didn't happen."

Elsewhere protesters set tyres on fire, and blocked off roads, while several residents reported that mobile internet was down in the city.

"There are some fires around the outskirts of the city. Tyre fires in the road and so on. Most of them are on the outskirts," said Dr. Abel Gedefaw, director of the College of Medicine and Health Sciences at Hawassa University.

"Everybody is not allowed to go out. There are a lot of security forces and nobody is allowed to move."

He said the university's medical facilities had not received reports of casualties as of early afternoon.

- 'Not happy' -

The Sidama issue is the latest headache for Prime Minister Abiy Ahmed, who is determined to reform the nation after decades of iron-fisted rule, but is facing ethnic violence in the diverse country that has displaced more than two million people.

Analysts warn the issue could inflame Ethiopia's political crisis and lead to bloodshed.

At present, Ethiopia is partitioned into nine semi-autonomous regions. The constitution requires the government to organise a referendum for any ethnic group that wants to form a new entity within a year of them requesting it.

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The Sidama have agitated for years to leave the diverse Southern Nations, Nationalities, and Peoples' Region of which they are a part, and create their own state.

The group said the deadline for the referendum was Thursday.

However Ethiopia's election board said this week it would hold a referendum before the end of the year. It said it had not received the referendum request until November 2018, meaning it still had several months to hold the vote.

Though the Sidama Liberation Movement political party earlier said a referendum held after July would be unacceptable, spokesman Desalegne Mesa told AFP Thursday that the party would accept the new timeline in the interest of peace.

"We agree to that point because even if the electoral board and the (ruling coalition) are ignoring the people and the constitution we are working to minimise the loss of life," he said.

However many young people who had agitated for the creation of a new state are "not happy" with plans for a November referendum and people are wary of how they might react, one Hawassa resident told AFP.