The negotiations in Tanzania between the government and the OLA followed talks in April and May that also failed to produce an agreement.
The OLA is an outlawed splinter group of a formerly banned opposition party that returned from exile in 2018. Its grievances are rooted in the alleged marginalization and neglect of people in Oromiya, which surrounds the capital Addis Ababa.
The violence in Oromiya has killed hundreds of people in the past few years and been one of Prime Minister Abiy Ahmed's main security issues since the end of a two-year civil war in the northern Tigray region last year.
"Due to the intransigence of the other party, the talks have come to an end without an agreement," Redwan Hussien, Abiy's national security adviser, said in a post on social media site X.
"The obstructive approach and unrealistic demands of the other party are the principal reasons why these talks could not succeed."
In a statement, OLA accused the government of failing to address the "fundamental problems that underlie the county's seemingly insurmountable security and political challenges."
A source close to the talks told Reuters that there were no plans to resume discussions.
The government struck a peace deal in November last year to end the conflict in Tigray after tens of thousands were killed and millions displaced.
But conflict has raged elsewhere. Besides Oromiya, fighting in the neighboring Amhara region between government forces and local militiamen has killed hundreds of people since late July.
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