Armenia accused Azerbaijani forces of striking the main city in the disputed Nagorno-Karabakh region on Friday as fighting raged for a sixth day.
Yerevan said it was ready to work with mediators for a ceasefire but Azerbaijan fired back that Armenia must first withdraw its troops.
Baku and Yerevan have for decades been locked in a simmering conflict over the ethnic Armenian province that broke away from Azerbaijan in a bitterly fought war in the 1990s.
New fighting that erupted on Sunday has been the heaviest in decades and has claimed nearly 200 lives, including more than 30 civilians.
Intermittent shelling and ambulance sirens were heard in Stepanakert, the main city in Karabakh, throughout the day, an AFP team reported.
Armenia said Azerbaijani forces struck Stepanakert, wounding "many" people, but some locals said they were not afraid.
"There is no fear. We have our pride," Arkady, a 66-year-old resident, told AFP. "There will be victims. A war is a war."
Separatist authorities said ten emergency response workers had been injured when Azerbaijan struck.
International calls for the neighbors to halt clashes and begin talks have intensified as fears grow that the fighting could expand into a multi-front war sucking in regional powers Turkey and Russia.
French President Emmanuel Macron has warned NATO member Turkey — which backs Azerbaijan — against the alleged deployment of militants from Syria to the Karabakh conflict.
Macron said intelligence reports had established that 300 fighters from "jihadist groups" in Syria had passed through Turkey en route to Azerbaijan, stressing "a red line has been crossed."
'Caught in the crossfire'
The separatist government in Stepanakert said Azerbaijani forces had destroyed a bridge linking Armenia to Karabakh and vowed a counterstrike.
"There will be a proportionate response," said Vagram Pogosyan, a spokesman for the separatist leader.
Azerbaijan retorted for its part Armenian forces were shelling a number of its settlements including the town of Terter.
In among the chaos, civilians were bearing the brunt of the surge in violence, the International Committee of the Red Cross warned.
"They are caught in the crossfire and deeply fearful for their safety and future," the advocacy group said, adding hundreds of homes as well as schools and hospitals had been destroyed.
Residents on both sides said they were getting used to the sound of war and spoke out against negotiations.
Arkady in Stepanakert, said he did not want the two sides to enter talks, describing negotiations with Azerbaijan as "nonsense" and insisting the enemy should be crushed.
In Azerbaijan too some expressed little appetite for talks.
"We are not afraid. We do not have a lot of wounded," Anvar Aliyev, a 55-year-old taxi driver, told AFP in the country's Fizulinsky district.
"We have to return to our lands."
'Ready to engage'
Yerevan expressed its readiness to work with international mediators to halt the fighting.
Armenia "stands ready to engage" with France, Russia, and the United States "to re-establish a ceasefire regime," the foreign ministry in Yerevan said.
But it said that talks could not begin unless clashes are halted.
Azerbaijan retorted that Armenia must first withdraw its troops.
Yerevan, which is part of a Moscow-led military alliance of ex-Soviet countries, has accused Azerbaijan of using "cluster munitions" prohibited by international law.
"Turkish military are fighting alongside Azerbaijani forces," said the foreign ministry. "Azerbaijan is using Turkish weaponry, drones and fighter jets."
Russian leader Vladimir Putin on Friday also expressed "serious concern" over the presence of foreign fighters in the conflict during a phone call with Armenian Prime Minister Nikol Pashinyan.
Meanwhile local and foreign journalists came under Armenian shelling in the village of Gapanly, Azerbaijan said.
Two journalists working for the French daily Le Monde were injured in a rocket strike and evacuated after undergoing surgery on Thursday.
In a joint appeal Thursday, Putin, U.S. President Donald Trump and Macron urged the two sides to return to negotiations aimed at resolving their longstanding territorial dispute.
Armenia has recorded 158 military deaths and 13 civilian casualties since Sunday. Azerbaijan has not reported any military deaths but said 19 civilians were killed after Armenian shelling.
Karabakh's declaration of independence from Azerbaijan sparked a war in the early 1990s that claimed 30,000 lives, but it is still not recognized as independent by any country, including Armenia.
Talks to resolve the conflict have largely stalled since a 1994 ceasefire agreement.