* Concern mounting as humanitarian ceasefire frays
* Fighting over Nagorno-Karabakh is heaviest in decades
* Russia appeals for sides to observe ceasefire
Azerbaijan accused Armenia on Wednesday of trying to attack its gas and oil pipelines and warned of a "severe" response as tensions rose sharply around a fraying ceasefire in the mountain enclave of Nagorno-Karabakh.
Armenia hit back by saying Azeri forces wanted to seize control of the tiny territory in the South Caucasus, which is governed by ethnic Armenians.
"Armenia is trying to attack and take control of our pipelines," Azeri President Ilham Aliyev said in an interview with Turkish broadcaster Haberturk.
"If Armenia tries to take control of the pipelines there, I can say that the outcome will be severe for them," he said.
Azerbaijan's defence ministry said separately that it would destroy all military facilities in Armenia that targeted Azeri civilian locations.
The Armenian defence ministry has denied firing on civilian targets, but said it reserved the right to target any military installations and combat movements in Azerbaijan.
It said on Wednesday that the Azeri side had opened fire towards the territory of Armenia and destroyed military equipment.
In a televised speech after Aliyev spoke, Armenian Prime Minister Nikol Pashinyan said the situation in the conflict area was "very difficult."
Azerbaijan was trying to occupy Nagorno-Karabakh, he said, using similar language to Azeri leaders who say Armenian forces are occupying the territory.
The fighting in one of the former Soviet Union's "frozen conflicts" is the worst since a 1991-94 war in which about 30,000 people were killed as the enclave broke away from Azerbaijan.
Azerbaijan has greater firepower than the Armenian forces and says it has made territorial gains since the latest fighting broke out on Sept. 27. Nagorno-Karabakh has acknowledged some setbacks but says the situation is "under control".
The ceasefire, brokered by Russia, was meant to allow the sides to swap prisoners and bodies of those killed, but the continued fighting has hindered those efforts.
The Kremlin and the Russian defence and foreign ministers issued new appeals for Azerbaijan and Armenia to observe the ceasefire as it buckled on Wednesday.
Russia has, with the United States and France, long led mediation over Nagorno-Karabakh by the OSCE security watchdog's "Minsk Group". Moscow has a defence pact with Armenia and is worried by Turkey and Azerbaijan suggesting the conflict could be solved militarily.
"We do not agree with the position voiced by Turkey, that was also expressed several times by President Aliyev," Russian Foreign Minister Sergei Lavrov said.
Lavrov said it would be right to deploy Russian military observers on Nagorno-Karabakh's line of contact, which separates the two sides, but that it was up to Azerbaijan and Armenia to decide.
In a speech to lawmakers from his ruling AK Party in parliament, Turkish President Tayyip Erdogan said the Minsk Group was stalling in dealing with the conflict, and said Nagorno-Karabakh must be given back to Azerbaijan.
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