* Ethiopia facing default on $1 bln international bond

* Talks with key bondholders broke down this week

* Government to hold call on next steps next week

Dec 8 (Reuters) - Ethiopia appeared to be on the brink of a debt default on Friday after talks with key holders of the African country's $1 billion international bond ended without agreement.

The combined cost of the COVID pandemic and the recently-ended civil war in its northern Tigray region has left Ethiopia, long seen as one of Africa's most promising economies, struggling to pay its debts.

Ethiopia's finance ministry said that "acute external liquidity pressures" meant it had told bondholders that it would not be in a position to pay a $33 million bond interest payment due on Dec. 11, an event which would trigger a default.

"Unfortunately, in the short time available between commencement of discussions and the upcoming interest payment date, an agreement... could not be reached," the finance ministry added in a statement.

Advisers for the bondholders did not immediately comment on the breakdown of discussions.

The finance ministry said Ethiopia would "broaden the engagement with the holders of its Eurobond" and hold a call next week to set out a possible proposal for the debt.

It said that during the talks with bondholders it had outlined an "initial restructuring proposal" and then after a counter offer from bondholders, a final proposal.

This would involve pushing back the planned 2024 repayment date, cutting the coupon rate to 5.5% from 6.625% as well as staggering more of the interim payments, it added.

The $1 billion bond, maturing in December 2024, was last bid around 61 cents on the dollar with a 66% yield. (Reporting by Bhargav Acharya and Marc Jones; Additional reporting by Rachel Savage and Karin Strohecker; Editing by Alexander Winning and Alexander Smith)