A group of dissident Eritrean soldiers have laid siege to the information ministry and forced state media to announce a call for the release of political prisoners, according to a senior Eritrean intelligence official.
The renegade soldiers forced the director of state television to make an announcement, the intelligence official said.
"The soldiers have forced him to speak on state TV, to say the Eritrean government should release all political prisoners," the source said on condition of anonymity.
Reports from Eritrea are difficult to independently verify, as the country restricts access to foreign media.
Dozens of soldiers with two tanks surrounded the ministry building in Asmara, regional diplomatic sources said.
They said state television and radio had gone off air.
Araya Desta, Eritrea's permanent representative to the UN, said: "There is no problem. Everything is quiet. Everything is going to be solved. It is all fine."
A statement from the US embassy in Asmara said it "is aware of press reports that tanks have reportedly surrounded some ministry buildings but cannot confirm all the reports. The situation remains fluid".
There was no immediate indication it was an attempt to overthrow the government of Eritrea, which has been led by Isaias Afewerki, 66, for about two decades since it broke away from bigger neighbour Ethiopia.
Micheala Wrong, a British journalist who has covered Africa extensively, told Al Jazeera: "We know there is restlessness among the troops, so if there is going to be any challenge to Afewerki, it will come from the army.
"What happens in Eritrea is crucial to what happens in the Horn of Africa, and I think the West should be watching this very closely," she said.
'No coup symptoms'
Salem Solomon, an Eritrean-American journalist based in Florida, told Al Jazeera the military in Eritrea is a "major force", with the standing army consisting of "between 200,000 and 300,000 soldiers".
"At the moment, the buzz word people are using is 'coup', but it doesn't have the symptoms of what a coup looks like," she said.
"There were no shootings," Solomon said, adding that the main opposition to the government "is coming from people who are abroad....Even though people in Eritrea are armed, and under the control of the military, there has not been much resistance."
The UN last year estimated that 5,000-10,000 political prisoners were being held in the country, which is accused by human rights groups of carrying out torture and summary executions.
The Red Sea state, which declared independence from Ethiopia after a long war, is one of the most opaque countries on the continent.
Eritrean opposition activists exiled in neighbouring Ethiopia said there was growing dissent within the Eritrean military, especially over economic hardships.
"Economic issues have worsened and have worsened relations between the government and soldiers in the past few weeks and months," one activist said.
The UN Security Council imposed an embargo on Eritrea in 2009 over concerns its government was funding and arming al-Shabab rebels in neighbouring Somalia - charges Eritrea denied.