Dissident Eritrean soldiers who had seized the information ministry were gone on Tuesday and calm returned to the capital, Asmara, an Eritrean envoy and Western diplomat said.

The soldiers took over the ministry on Monday to demand the release of thousands of political prisoners, a sign of a deepening rift between some factions of the military and the secretive country's president, Isaias Afewerki.

Eritrea's envoy to South Africa said there had been a "small incident" at the ministry but that order had been restored.

"The situation in Asmara and elsewhere is no different from any other day," Salih Omar Abdu told Reuters.

Opposition website Awate.com, based in the US but with close connections inside Eritrea, said that the commander of around 100 rebel soldiers had agreed to surrender.

"The face-off was 'solved' when the government 'accepted his terms'" Awate said, although there were no further details as to what will happen next.

State television was back on air. Its main headline was the heavy snow in Paris, an Asmara-based diplomat said.

It was unclear how order had been restored. There were no reports of gunshots.

The mutineers, about 200 soldiers backed by tanks, had not made public demands beyond the release of political prisoners, estimated by the UN to number between 5,000 and 10,000 in the country of about 6 million people.

The Red Sea state has become increasingly isolated under the two-decade rule of 66-year-old former guerrilla Isaias who led his country to independence in 1993 after a 30-year war with the government in Ethiopia.

Growing economic hardship for many Eritreans, despite an influx of investment from gold miners, is eating away at Isaias' support base, regional diplomats say.

Phone lines to the information ministry were open on Tuesday, but calls from Reuters journalists were disconnected.

An official from the commissioner of police's office said "There's no problem."

Yemane Ghebremeskel, director of the Office of the President, said on Twitter "All is calm today as it was indeed yesterday."

Eritrea occupies a strategic strip of mountainous land overlooking the entrance to the Gulf of Aden, one of the world's busiest shipping lanes.

Shares in gold companies with mines or projects fell sharply on Monday. Toronto-listed Nevsun Resources Ltd was down 9 percent. Those in the small explorer Sunridge Gold Corp were at one point in the session down 26 percent.

Reuters - AFP