Azeri officials claimed up to 20 Armenian troops were killed in the skirmish along the line of demarcation between Nagorno-Karabakh and Azerbaijan.
The region's defense ministry claimed Azeri commandos attacked Armenian solders, and "The Armenian side forced the enemy to escape after a two hour clash."
Nagorno-Karabakh is surrounded by Azerbaijan but controlled by majority ethnic Armenians, and has been a frequent site of tensions between the two countries since a war was fought over it in the 1990s.
Armenia has financially backed the mountainous region for more than two decades, but Azerbaijan often threatens to take back the territory by force, something Armenia, an ally of Russia's, says it will not stand for.