Baku launched a military operation against the Armenian-backed separatist region Tuesday, demanding Armenian forces withdraw from the mountainous territory as a precondition for peace.
"In order to stop the anti-terrorist measures, the illegal Armenian armed forces must raise the white flag, surrender all weapons, and the illegal regime must dissolve itself," Azerbaijan's presidency said.
It said it was willing to meet Armenian representatives in Yevlakh, an Azerbaijani town around 100 kilometres (60 miles) north of the separatist stronghold Stepanakert, but only if the separatists surrendered.
"Otherwise, the anti-terrorist measures will continue until the end," it warned.
Armenian-backed separatists earlier urged Azerbaijan to start negotiations and cease hostilities.
"The (Karabakh) side calls the Azerbaijani side to immediately cease fire and sit at the negotiating table to address the situation," the breakaway region's foreign ministry said.
Prime Minister Nikol Pashinyan said the Armenian army was not involved in the fighting and the situation on the border between Armenia and Azerbaijan was "stable".
The ex-Soviet Caucasus rivals have been locked in a decades-long dispute over Karabakh with large-scale hostilities breaking out in the 1990s and in 2020.
The fighting came just hours after Azerbaijan said four police officers and two civilians were killed in mine blasts in Nagorno-Karabakh, with authorities blaming separatists.
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