Both Azerbaijan and Armenia have agreed to observe the ceasefire along the contact line effective from 3 pm Saturday local time. Dozens of people have already been killed before this latest truce. Local residents say they want peace to prevail.

"This is our home, we don't want to be forced to leave. We hope the peace will prevail, then we can continue to live here. We don't want to leave," said a woman.

Before the latest agreement, the two nations were accusing each other on breaching a Moscow-mediated ceasefire which took effect on Tuesday. Azerbaijan's Defence Ministry said on Friday that its troops returned fire after Armenian forces shelled Azerbaijani military positions and populated areas.

Meanwhile, Armenia accused Azerbaijan of shelling its positions, killing two Armenian soldiers overnight. The spate of violence has sparked concern of a wider conflict in the strategic location that could drag in regional powers like Russia and Turkey.