Casualties were unclear but Armenia's defence ministry said an unspecified number of civilians had been killed by Azerbaijan's forces.
The two countries have long been at odds over Azerbaijan’s breakaway, mainly ethnic Armenian region of Nagorno-Karabakh which declared independence during a conflict that broke out as the Soviet Union collapsed in 1991.
Though a ceasefire was agreed in 1994, Azerbaijan and Armenia frequently accuse each other of attacks around Nagorno-Karabakh and along the separate Azeri-Armenian frontier.
Armenia's defence ministry said its troops had destroyed three tanks and shot down two helicopters and three unmanned aerial vehicles in response to an attack on civilian targets including the regional capital of Stepanakert.
"Our response will be proportionate, and the military-political leadership of Azerbaijan bears full responsibility for the situation," the ministry said in a statement.
Azerbaijan denied the Armenian defence ministry statement, saying it had "complete advantage over the enemy on the front." Hikmet Hajiyev, senior adviser to Azerbaijan's president, Ilham Aliyev, accused Armenian forces of launching "deliberate and targeted" attacks along the front line.
Azerbaijan's defence ministry said Armenia had attacked civilian settlements and military positions along the "contact line," a heavily-mined no-man's-land that separates the Armenian-backed forces from Azeri troops in the region.
It said some civilians had been killed "as a result of the intensive shelling" by Armenia, and that Azerbaijan had taken retaliatory measures.
It said Azerbaijan's army launched a "counter-offensive operation along the entire front to suppress the combat activity of the armed forces of Armenia and ensure the safety of the civilian population."
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