Eritrean soldiers with tanks laid siege to the information ministry on Monday and forced state media to call for political prisoners to be freed, a senior intelligence official said.
The renegade soldiers had not gone as far as to call for the overthrow of the government of one of Africa's most secretive states, long at odds with the United States and accused of human rights abuses.
Eritrea has been led by Isaias Afewerki for some two decades since it broke from bigger neighbor Ethiopia.
Soldiers had forced the director general of state television "to say the Eritrean government should release all political prisoners," the Eritrean intelligence source told Reuters on condition of anonymity.
There was no immediate statement from the Asmara government.
Accusing Eritrea of torture and summary executions last year, the United Nations human rights chief estimated that 5,000-10,000 political prisoners were being held in the country of about 6 million people.
State media went off air after the call for prisoners to be freed, the intelligence official and diplomats in the region said. One Western diplomat in neighboring Ethiopia said other buildings might have been seized by soldiers too.
The gold-producing state, on a strategic strip of mountainous land along the Red Sea coast, is one of the most opaque countries on the continent and restricts access to foreign reporters.
Eritrean opposition activists exiled in neighboring Ethiopia said there was growing dissent within the Eritrean military, especially over economic hardship.
Despite its relatively small population, Eritrea has Africa's second biggest army.
"Economic issues have worsened and have worsened relations between the government and soldiers in the past few weeks and months," one activist told Reuters.
Eritrea broke from Ethiopia in 1991. The two countries fought a 1998-2000 war over a border which remains disputed. Relations between them are perennially strained, with Eritrea denying accusations it backs Ethiopian insurgents.
The United Nations' Security Council imposed an embargo on Eritrea in 2009 over concerns its government was funding and arming Al Shabab rebels in neighboring Somalia - charges Asmara denied.
Diplomatic sources told Reuters Isaias survived an assassination attempt by a disgruntled soldier in 2009.
Eritrea moved to quash speculation last year that Isaias was sick. It showed television pictures of him lambasting the United States for spreading lies about his condition. He has no obvious successor.
Asmara has accused the United States of working behind the scenes to topple Isaias. A US diplomatic cable released by Wikileaks described him in 2009 as an "unhinged dictator."
Gold companies with mines or projects in Eritrea include Sunridge Gold Corp., Nevsun Resources Ltd., and Chalice Gold.