A 50-year-old Azeri woman and her granddaughter were killed and another civilian wounded by Armenian forces near the Nagorno-Karabakh region, Azerbaijan's defence ministry said on Wednesday.
Sporadic exchanges of fire in the fight for control over the region, inside Azerbaijan but controlled by ethnic Armenians, have stoked fears of a wider conflict breaking out in the South Caucasus, which is criss-crossed by oil and gas pipelines.
"Two residents of the village of Alkhanly, including a two-year-old girl, were killed and one was wounded on July 4 as a result of shelling by Armenian forces," Azeri defence ministry spokesman Vagif Dergakhly told a news conference.
Azeri forces had returned fire, he said, inflicting casualties on the other side.
The deaths were "a result of a targeted and deliberate attack on civilians by the armed forces of Armenia" using mortars and heavy grenade launchers, Azerbaijan's foreign ministry said in a statement.
Nagorno-Karabakh's separatist leadership said Azeri forces had violated the ceasefire agreement, opened fire first and used anti-tank and other heavy weapons.
It said there were no losses among their servicemen, only among the villagers. It gave no further details.
Fighting between ethnic Azeris and Armenians erupted in 1991 and a ceasefire was agreed in 1994. But Azerbaijan and Armenia regularly accuse each other of carrying out attacks around Nagorno-Karabakh and along the Azeri-Armenian border.
Skirmishes have intensified in the past three years, and at least 200 people were killed in a violent flare-up in April last year.
Both sides have significantly increased their use of heavy artillery and anti-tank weapons since then when self-guided rockets and missiles were reported to have been fired near densely populated areas along the contact line.
The attack on the village was strongly condemned by Turkey.
The “international community should acknowledge the fact that this deliberate and systematic policy pursued by Armenia towards fuelling violence is the main obstacle to the peaceful resolution of the Nagorno-Karabakh conflict and put pressure on Armenia to withdraw its troops from the occupied territories of Azerbaijan,” the Turkish foreign ministry said in a statement.
Turkey is a member of the OSCE Minsk Group, which was established to settle the Nagorno-Karabakh conflict.