YEREVAN (BLOOMBERG) - Russian President Vladimir Putin has called for an immediate end to the fighting along the front line of Nagorno-Karabakh, after Armenia and Azerbaijan said fierce clashes had erupted in the disputed region.

"President Putin calls on the parties in the conflict to observe an immediate ceasefire and exercise restraint in order to prevent further casualties," Kremlin spokesman Dmitry Peskov told Russian news agencies.

President Putin's urging came after the escalation of hostilities when Azerbaijan stepped up attacks against Armenians in a disputed region of the South Caucasus on Saturday (April 2). using artillery, tanks and air raids. A child was killed and two others wounded.

The attacks, targeting civilian areas and military units across the contact line of Nagorno-Karabakh, came in response to Armenian shelling of Azeri areas, Azerbaijan's Defense Ministry said on its website.

It denied Armenian reports that one of its military helicopters was shot down.

Armenia called the attacks "unprecedented and aggressive" and said they may lead to "unpredictable consequences" if they continue.

A resumption of large-scale hostilities would threaten energy infrastructure around Azerbaijan, the former Soviet Union's third-biggest oil producer, and a destination for more than $50 billion (S$67.5 billion) of investment from BP Plc and its partners over the past two decades.

Armenians took control of Nagorno-Karabakh and seven adjacent districts from Azerbaijan in a war after the Soviet Union collapsed in 1991. Around 30,000 people were killed and more than a million others displaced. Hostilities ended with a Russia-brokered cease-fire in 1994, yet no peace accord has been signed.

Both sides have suffered losses in this week's fighting. Two Armenian servicemen were killed by Azeri fire on April 1 in Armenia and Karabakh, Defense Ministry spokesman Artsrun Hovhannisyan said on Facebook.