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YEREVAN/BAKU: Fighting between Armenia and Azerbaijan escalated sharply on Monday in and around the mountain territory of Nagorno-Karabakh and at least 30 people were killed in a second day of heavy clashes.

Forces of the two ex-Soviet neighbours pounded each other with rockets and artillery in the fiercest explosion of the decades-old conflict in more than a quarter of a century.

Any move to all-out war could drag in major regional powers Russia and Turkey. Moscow has a defence alliance with Armenia, while Ankara backs its ethnic Turkic kin in Azerbaijan.

"We haven't seen anything like this since the ceasefire to the war in the 1990s. The fighting is taking place along all sections of the front line," said Olesya Vartanyan, senior analyst for the South Caucasus region at Crisis Group.

She said increased deployment of rockets and artillery brought a higher risk of civilian casualties that could make the escalation hard to stop by diplomatic means.

"If there are mass casualties it will be extremely difficult to contain this fighting and we will definitely see a full-fledged war that will have a potential intervention of Turkey or Russia, or both of them," Vartanyan said.

Majority Christian Armenia and mainly Muslim Azerbaijan first clashed in the 1980s over Nagorno-Karabakh, a breakaway region that is inside Azerbaijan but mostly populated and run by ethnic Armenians.

The fighting has revived concern over stability in the South Caucasus, a corridor for pipelines carrying oil and gas to world markets.