Authorities in Armenia-occupied Karabakh say more than 100 fighters were also wounded in clashes with Azerbaijan's soldiers. Separately, Baku says it has captured seven of its Armenian-occupied villages in heavy fighting.

Sixteen Armenian servicemen have been killed in Armenia-occupied Karabakh after heavy fighting broke out between the republics of Azerbaijan and Armenia.

"According to preliminary data, 16 servicemen were killed and more than 100 wounded" since fighting erupted, authorities in the disputed region said, while both Baku and Yerevan reported civilian casualties on Sunday.

Azerbaijan also captured a "strategic" mounatin and seven of its Armenian-controlled villages in heavy fighting.

Fighting between both Caucasus neighbours broke out along the disputed region after Armenia attacked Azerbaijani civil and military positions, while Azerbaijan "liberated seven villages" during its counter-offensive.

"We have liberated seven villages," a Defence Ministry spokesperson said.

"Moreover, the enemy's positions in the direction of Aghdara and Murovdagh were destroyed, and strategic heights were taken under the control," the ministry added.

Baku said an Azerbaijani family of five was killed in Armenian shelling.

"As a result of artillery shelling a family comprising five members was killed in (Azerbaijan's) village of Gashalty," the office of Azerbaijan's prosecutor general said in a statement.

( State of war declared )

Azerbaijan's Parliament declared a state of war in some of its cities and regions.

"Martial law will be introduced as of midnight as well as a curfew from 9 pm to 6 am," in Baku, several other cities and districts that are close to the Karabakh frontline, presidency spokesman Hikmet Hajiyev told journalists.

Hajiyev said Azerbaijani forces captured a strategic mountain that helps control transport communications between Yerevan and the Armenian-held enclave.

Azerbaijani forces have taken the 3,000-metre-high "strategic" Murovdag peak in Karabakh, Hajiyev said.