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BAKU: Azerbaijan said Sunday that its forces had captured the key town of Shusha from Armenian separatists in Nagorno-Karabakh, but Armenia insisted that fighting continued for the strategic area.

The capture of Shusha, known to Armenians as Shushi, would be a major victory for Azerbaijan six weeks after fighting erupted anew over Nagorno-Karabakh, an ethnic Armenian enclave that broke away from Azerbaijan's control in the 1990s.

The fortress town sits on cliffs around 15 kilometres (nine miles) from Nagorno-Karabakh's largest city Stepanakert and on the main road to Armenia, which backs the separatists.

Both sides have reported fierce clashes around the town after Azerbaijani forces swept across the southern flank of Nagorno-Karabakh and pushed through its mountain passes.

In a televised address to the nation on Sunday, Azerbaijani President Ilham Aliyev said it had been captured.

"With great pride and joy, I inform you that the town of Shusha has been liberated," said Aliyev, dressed in military fatigues and standing in front of an Azerbaijani flag.

"Our liberation march continues. We will go to the end, until the complete liberation of the occupied territories," Aliyev added.

Armenian officials denied the stronghold had fallen, with defence ministry representative Artsrun Hovhannisyan saying that despite substantial Azerbaijani reinforcements, "tomorrow, with God's help, the battle for Shusha will end.

"We became technically better and stronger, we were able to neutralise the enemy's technological advantage," he insisted.

"And in the end, we fight at home ... and winter is coming," the official said. Flag-waving Azerbaijanis celebrated in the capital Baku after Aliyev's announcement however, with cars honking their horns as residents crowded along city streets despite coronavirus restrictions. "I did not leave the house for a week, but today I came out to say that Shusha has been liberated. We are happy, congratulations to all my people," said 32-year-old Baku resident Shargiya Dadashova.-AFP

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