Armenian and Azerbaijani forces exchanged heavy rocket and artillery in Stepanakert on Sunday though the city came under shelling since Friday.
AFP journalists said there were regular explosions and clouds of black smoke rising in parts of the city.
Azerbaijan's Defense Ministry said meanwhile that Armenian forces had shelled Ganja, a city of more than 330,000 in western Azerbaijan, with footage showing buildings in ruins.
On Sunday night, Hikmet Hajiyev, an Adviser to President Ilham Aliyev, wrote on Twitter that Armenians launched "missile attacks against Azerbaijani civilians and civilian infrastructure" in the industrial city of Mingechavir and the Absheron district, some 80 kilometers (50 miles) from capital Baku.
Stepping up its bellicose rhetoric, Karabakh's presidency threatened to "expand subsequent (military) actions to the entire territory of Azerbaijan".
Each side accused the other of targeting civilian areas, as the Nagorno-Karabakh conflict widened a week after heavy fighting broke out in the decades-old dispute over the ethnic-Armenian region.
Armenia and Azerbaijan have resisted international calls for a ceasefire to the Nagorno-Karabakh conflict and clashes have intensified in recent days, with both sides claiming victories on the front and saying they are inflicting heavy losses.
In a fiery address to the nation, Azerbaijani President Aliyev set conditions for a halt to the Nagorno-Karabakh conflict that would be near impossible for Armenia to accept.