Azerbaijan said on Sunday it would stop fighting Armenian-backed troops over the breakaway Nagorno-Karabakh region after two days of renewed clashes killed dozens and drew international calls for an immediate ceasefire.
Nagorno-Karabakh, which lies inside Azerbaijan but is controlled by ethnic Armenians, has run its own affairs with heavy military and financial backing from Armenia since a separatist war ended in 1994.
But the situation along the tense "contact line" has deteriorated in past weeks and a fresh eruption of violence on Saturday left multiple dead on both sides.
"Having taken into account ... appeals from international organisations, Azerbaijan has decided to unilaterally cease retaliatory military actions and will consolidate yesterday's territory gains," RIA news agency quoted the Azeri Defence Ministry as saying.
Nagorno-Karabakh officials, however, said the fighting had not let up.
"At this very moment, hostilities continue," Interfax news agency quoted a spokesman for the separatist forces as saying.
"In the last 24 hours, Azerbaijan has twice declared a cessation of hostilities, but the reality and situation now is that no practical steps have been taken on their side," the spokesman said.
Azerbaijan and Armenian-backed forces have both reported civilian casualties and accused each other of violating a 1994 ceasefire, brokered after fierce fighting in the breakaway region left some 30,000 people dead.
The Azeri Defence Ministry said its forces had destroyed 10 separatist tanks and killed multiple fighters in overnight clashes.
The Nagorno-Karabakh military said its losses were much lower and that it had destroyed 14 Azeri tanks and five armoured vehicles in the past 24 hours.
"This is another display of the unrestrained fantasies on the Azeri side," RIA cited a military spokesman as saying.
Crisscrossed with pipelines and sandwiched between the Caspian and Black seas, stability in the southern Caucasus is a major strategic objective for Azerbaijan and other large oil and gas producers in the region.
World top oil producer Russia - which maintains a garrison of troops, jets and attack helicopters in northern Armenia - has been a key mediator in the conflict over Nagorno-Karabakh which is home to around 150,000 people, and moved on Saturday to suppress the renewed violence.
President Vladimir Putin urged the warring sides to immediately observe the ceasefire while Russia's foreign and defence ministers talked by phone with their Armenian and Azeri counterparts.
The Azeri presidential press service said Turkey, the other major power in the region along with Russia, had voiced support for Baku's actions, RIA reported.
The United Nations has also called on the parties involved to put an immediate end to the fighting and to respect the ceasefire agreement.