Skirmishes break out frequently between Azeri and Armenian-backed forces near Nagorno-Karabakh, a small mountain region where ethnic Armenians threw off Azeri rule at the time of the collapse of the Soviet Union.
The unresolved conflict is a constant threat to stability in the strategic South Caucasus, sandwiched between Russia, Turkey and Iran and criss-crossed by pipelines carrying oil and gas to Europe, much of it from Azeri reserves in the Caspian Sea.
The Azeri Defence Ministry said in a statement that two Azeri soldiers and three Armenians were killed when Azeri security forces repelled an enemy assault near the village of Chaili on Nagorno-Karabakh's northeastern flank.
Karabakh authorities blamed an attack by an Azeri "special forces group", Armenian agencies reported. Just one Armenian Karabakh soldier was wounded and the Azeri forces "suffered losses", the Karabakh military said.
The accounts could not be independently verified as international observers only carry out periodic monitoring of the frontline.
The clash follows conflicting reports about an Azeri soldier who Azerbaijan says was captured this week by Armenian forces. The Karabakh authorities say he deserted.
An estimated 30,000 people died in the fighting over Nagorno-Karabakh, which broke out in the late 1980s as the Soviet Union headed towards its collapse and ended with a ceasefire in 1994.
Armenian forces captured seven surrounding Azeri districts, forming a corridor linking the region with Armenia.
Years of talks, mediated by the United States, Russia and France, have yet to yield a peace deal. Azerbaijan -- spending heavily on its military and host to oil majors including BP
In June, four ethnic Armenian soldiers and one Azeri were killed in an exchange of fire.
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