Armenia and Azerbaijan have reported further bloodshed in Nagorno-Karabakh as the worst spate of fighting since the 1990s raged for a third day in the region, and as heavy weaponry was moved to the front lines.

Dozens have been reported killed and hundreds wounded since clashes between Azerbaijan and its ethnic Armenian mountain enclave of Nagorno-Karabakh broke out on Sunday, in a new eruption of a decades-old conflict.

Azerbaijan’s President Ilham Aliyev said 10 civilians had been killed by Armenian shelling since Sunday. There was no official information about casualties among Azeri servicemen.

Armenia’s defence ministry said an Armenian civilian bus in Vardenis – an Armenian border town far from Nagorno-Karabakh – caught fire after being hit by an Azeri drone, but no one appeared to be hurt. It said it was making further checks.

“Both sides are making the claim that the other is using high-grade sophisticated weaponry,” Al Jazeera’s Robin Forestier-Walker reported from Georgia.

“International monitors are saying this is the worst fighting since 1994, which is an indication of the modern weaponry that is being deployed.

“The Azeri authorities are giving much more specific information about what territories they have seized, or claiming to have seized, while the Armenian side is being a lot more specific about the casualties that they have sustained and the number of Azeri servicemen they have killed.”

Renewed violence has reignited concern over stability in the South Caucasus region, a corridor for pipelines carrying oil and gas to world markets.

On Tuesday, German Chancellor Angela Merkel urged an immediate ceasefire and de-escalation of the conflict in phone calls with the countries’ leaders.

Separately, the UN Security Council is expected to hold emergency talks behind closed doors later on Tuesday, at 21:00 GMT, after France and Germany led a push for the issue to be placed on the agenda.

Armenia and Azerbaijan have been locked in a territorial dispute since the 1990s when Karabakh, an ethnic Armenian enclave within Azerbaijan, declared independence after a war that left some 30,000 people dead.

Nagorno-Karabakh’s independence is not recognised by any country, and it is considered part of Azerbaijan by the international community.

Any move to all-out war could drag in regional powers Russia and Turkey. Moscow has a defence alliance with Armenia, which provides vital support to the enclave and is its lifeline to the outside world, while Ankara backs its ethnic Turkic kin in Azerbaijan.

France, Russia and the United States have mediated peace efforts under the umbrella of the Minsk Group, but the last big push for a peace deal collapsed in 2010.

“We haven’t seen anything like this since the ceasefire to the war in the 1990s. The fighting is taking place along all sections of the front line,” Olesya Vartanyan, senior analyst for the South Caucasus region at the International Crisis Group, told Reuters.

Vartanyan said the use of rockets and artillery brought a higher risk of civilian casualties, which could make the escalation hard to stop by diplomatic means.

Russia has called for an immediate ceasefire while Turkey said it would continue to support Azerbaijan.

Turkish President Recep Tayyip Erdogan has demanded that Armenia immediately quit Azerbaijani lands he said it was occupying, adding it was time to end the Nagorno-Karabakh crisis.

Azerbaijan’s defence ministry said it had been attempting to recover lost ground overnight while Armenia reported fighting throughout the night, saying Nagorno-Karabakh’s army had repelled attacks in several directions along the line of contact.

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