More than 60 people were killed and over 70 wounded during ethnic violence in the western region's Amuru district from August 30 to 31, says Ethiopian Human Rights Commission.
The Oromo Liberation Army, designated a terrorist organisation by Addis Ababa, said the Amhara Fano militia staged the attack and killed at least 62 people in Agamsa.
Oromo Liberation Army denies its fighters killed over 400 Amhara civilians, the East African country's second-largest ethnic group after the Oromo.
Parliament's announcement comes as African Union calls for a probe into killings in Oromia state's western area, where OLA rebels are accused of killing hundreds of people.
"Citizens living in the Qellem Wollega zone of Oromia state have been massacred," Ethiopian PM Abiy Ahmed says, vowing to "eradicate" Oromo Liberation Army.
How the Ethiopian leader and the peace award winner suddenly found himself fighting the Tigrayan rebels as a frontline soldier.
The east African country is hit by serious clashes as the Tigray regional government is accused of rebelling against the federal government.
Over 3,000 people have been arrested in more than a week of protests following the killing of popular singer and activist Hachalu Hundessa, a hero to many Oromo who saw him as the voice of their marginalisation.
A growing social media campaign echoes the #BringBackOurGirls activism in Nigeria over the mass kidnapping there of scores of schoolgirls in 2014 as Ethiopians attempt to pressure the government for answers over the abduction in the Oromia region.
Amnesty International says the death toll could increase as they investigated new reports of casualties. Jawar Mohammed, a former ally of PM Abiy Ahmed, told his supporters it was "not the time to kill each other", reminding them to stay alert.
Hundreds of supporters of prominent Ethiopian activist Jawar Mohammed set up camp around his house in Addis Ababa, one day after police fired gunshots and teargas to break up demonstrations that witnessed casualties.
The conflict began in April around 400 kilometres (250 miles) south of the capital Addis Ababa. More than 1.2 million people have been forced to flee since, the UN report says.
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