Meles Zenawi has admitted jamming radio broadcasts
The Ethiopian government is waging a sustained attack on its opponents in the run-up to an election in May, US-based Human Rights Watch says.
The group accuses the ruling EPRDF party of using its control of local government to withhold services and job opportunities from political opponents.
The activists also said new laws had severely restricted the activities of activist groups and journalists.
Government officials said the claims were ridiculous and outrageous.
Spokesman Bereket Simon told the BBC that the report was aimed at tarnishing the image of the country.
Prime Minister Meles Zenawi was hailed as one of a new generation of democratic African leaders in the 1990s, but rights groups have increasingly accused him of cracking down on his critics.
One of the country's most prominent independent newspapers - the weekly Addis Neger - was closed in November.
And last week Mr Zenawi admitted to jamming transmissions from the Voice of America's Amharic language service, accusing it of broadcasting "destabilising propaganda".
"Expressing dissent is very dangerous in Ethiopia," said Georgette Gagnon, Human Rights Watch Africa director.
"The ruling party and the state are becoming one and the government is using the full weight of its power to eliminate opposition and intimidate people."
The BBC's Will Ross says opposition groups disputed the last election results in 2005, but when protestors took to the streets, they were shot.
Reports of the number of people killed varied between 50 and almost 200.
Human Rights Watch says the government has ensured these events will not be repeated when the country votes on 23 May, because there is no longer any way to protest.
Mr Bereket dismissed the claims and said people had a constitutional right to stage demonstrations.