Azerbaijan and Armenia have been locked in a bitter conflict over Karabakh since Armenian separatists backed by Yerevan seized control of the mountainous province in a 1990s war that left 30,000 people dead.
One witness said they were woken by a huge blast that levelled an entire square block of one- and two-floor houses in the early hours of the morning, leaving nine apartments destroyed.
Azerbaijan claims to have made gains in Karabakh in recent days, with its defence ministry saying that 14 settlements have been taken as well as a strategically important plateau.