Each side accused the other of launching "sabotage" attacks in the early hours of Saturday morning.
Skirmishes are common around the mountain region, where Christian ethnic Armenians threw off rule by Muslim Azerbaijan with the support of Armenia in fighting that erupted as the Soviet Union collapsed two decades ago.
The unresolved conflict is a constant threat to stability in the South Caucasus, a region bordering Russia, Iran and Turkey, and criss-crossed by pipelines carrying oil and gas to Europe.
The Azeri Defence Ministry said its forces suffered the casualties when repelling an Armenian attack. It initially said one soldier was killed and another wounded. Private Azeri broadcaster ANS and the APA news agency, citing the ministry, later reported that the wounded soldier had also died.
The Nagorno-Karabakh army had said in a statement earlier that it had fought off an assault by an Azeri sabotage unit at the northeastern section of the front line on Saturday morning.
"As a result of the measures taken by the Karabakh side ... the Azeris were driven back, leaving one body," it said, adding that no Armenians were killed.
On Tuesday, Azerbaijan said two of its soldiers and three Armenians had died in fighting. Armenian-backed forces in Nagorno-Karabakh denied suffering any losses in that clash.
Speaking the next day, Azeri President Ilham Aliyev promised his country's flag would again fly over Nagorno-Karabakh. Oil-producing Azerbaijan, host to oil majors including BP, ExxonMobil and Chevron, frequently threatens to take the region back by force and has spent heavily on its military in recent years.
An estimated 30,000 people died in the war which ended with a ceasefire but no peace deal in 1994. Armenian forces hold seven Azeri districts surrounding Nagorno-Karabakh which form a land corridor with Armenia.
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