TBILISI, Sept 9 (Reuters) – Azerbaijan said on Saturday that Armenian forces had fired on its troops overnight, and that Azerbaijan army units took "retaliatory measures", in an incident denied by Armenia.

The claim and counter-claim came against the backdrop of rising tensions between the two countries, which have fought two wars over the Armenian-populated enclave of Nagorno-Karabakh in the past three decades, and a flurry of calls to foreign leaders by Armenian Prime Minister Nikol Pashinyan.

Azerbaijan's defence ministry said Armenian units opened small arms fire on Azerbaijani soldiers in Sadarak in the north of Nakhchivan, an exclave of Azerbaijan that borders Armenia, Turkey and Iran.

The ministry's statement did not say if there had been any casualties. Armenia's defence ministry denied that its forces had opened fire on Azerbaijani positions.

The Armenian government said Pashinyan held phone conversations on Saturday with the leaders of France, Germany, neighbouring Iran and Georgia, and with U.S. Secretary of State Antony Blinken. Azerbaijan said its foreign minister discussed the situation with a senior U.S. State Department official, Yuri Kim.

Pashinyan said in the calls that tensions were rising on the border and Azerbaijan was concentrating troops there and around Nagorno-Karabakh, his government said. Baku has denied this, while accusing Armenia of doing the same thing.

Pashinyan said he was ready to hold an urgent meeting with Azerbaijani President Ilham Aliyev to defuse tensions, the government said. But Hikmet Hajiyev, foreign policy adviser to Aliyev, told Reuters that Baku had received no such offer.

Azerbaijan meanwhile denounced the holding on Saturday of a presidential election in Nagorno-Karabakh, a territory that is internationally recognised as part of Azerbaijan but is populated by about 120,000 ethnic Armenians.

Nagorno-Karabakh established de facto independence in a war in the early 1990s after the collapse of the Soviet Union, but Azerbaijan recaptured significant amounts of territory in its most recent war with Armenia, in 2020.

Azerbaijan has cut off the road that links Armenia to Karabakh for the past nine months, except for urgent medical cases, leading to shortages of basic supplies, including bread.

It has accused Armenia of using the corridor to smuggle weapons, and of rejecting an offer to reopen the road simultaneously with another route into Karabakh.

On Saturday, Karabakh's separatist parliament elected Samvel Shahramanyan, a military officer and former head of the territory's security service, as its new president, after the previous incumbent resigned earlier this month.

In a speech to parliament, Shahramanyan called for direct negotiations with Azerbaijan, and for transport links to Armenia to be restored.

Azerbaijan's foreign ministry called the ethnic Armenian leadership of Karabakh a "puppet separatist regime" and in a statement said the vote was illegal.

"The only way to achieve peace and stability in the region is the unconditional and complete withdrawal of the Armenian armed forces from the Karabakh region of Azerbaijan and the disbandment of the puppet regime," the statement said.

In statements, both Ukraine and Baku's traditional ally Turkey condemned the election, and expressed support for Azerbaijan's claim to Karabakh. The European Union said it did not recognise the election, but that Karabakh residents should "consolidate around the de facto leadership" in talks with Baku.

Russia has had peacekeepers in Karabakh since 2020 but Armenia has voiced frustration at what it sees as their ineffectiveness, blaming Russia's preoccupation with Ukraine.

In the capitals of both Armenia and Azerbaijan, residents told Reuters they feared a new war between the two countries.

"We will probably have martyrs again," said Mansura Lahicova, a woman in the Azerbaijani capital Baku. "I have two sons who have reached military age. I hope it will be a victory and that everything calms down."

In Armenia's capital Yerevan, a local resident who gave his name as Hayk accused Azerbaijan of wanting to start another war.

"I hope this does not happen, but if it does, all of us, all friends and brothers, are ready to go to war. Last time we buried our friends, now it's our turn."