Led by the African Union (AU), the negotiations in Pretoria follow a surge in fierce fighting in recent weeks that has alarmed the international community and triggered fears for civilians caught in the crossfire.
The talks are being held at South Africa's foreign affairs ministry headquarters in Pretoria.
AU Horn of Africa envoy and Nigerian former president Olusegun Obasanjo, who is the talks' chief facilitator, was photographed entering the meeting venue on Wednesday morning.
Kenya's ex-president Uhuru Kenyatta who is part of the mediating team, was also seen entering the building.
South Africa's ex-vice president Phumzile Mlambo-Ngcuka and a US envoy, Mike Hammer, are also participating.
The talks opened on Monday and are due to run until Sunday, according the South African presidency.
But there has so far been a media blackout with journalists kept outside the venue's perimeter fence.
The dialogue between negotiators from the Ethiopian government of Prime Minister Abiy Ahmed and the regional authorities in war-stricken Tigray came almost two months to the day since fighting resumed, shattering a five-month truce.
The international community has been calling for an immediate ceasefire, humanitarian access to Tigray where many face hunger, and a withdrawal of Eritrean forces, whose return to the conflict has raised fears of renewed atrocities against civilians.
"There is no military solution to this conflict, and these talks represent the most promising way to achieve lasting peace and prosperity for all Ethiopians," US Secretary of State Antony Blinken said in an overnight statement welcoming the negotiations.
AU Commission chair Moussa Faki Mahamat welcomed the launch of the eagerly-awaited process.
He said he was "encouraged by the early demonstration of commitment to peace by the parties" and reiterated the AU's continued support for a process "to silence the guns towards a united, stable, peaceful and resilient Ethiopia."
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