From the Russian-language blogs of some connected Armenians (they say they got the info directly from Martakert), here is what emerges:

2-3 Azeri troops tried to secretly cross the demarkation line (recobut were spotted by 2-3 Armenian guys on the advanced observer post. These Armenians got into action, but one of them stepped on the mine and lost a leg, another got wounded; the command ordered them to retreat to safety (the leg was later amputated but nobody died); the observer post and its vicinity was bombarded by Armenian light artillery cutting the retreat ways of Azeri guys; Azeri command sent a rescue mission, 5-6 people, to save their comrades; most of them were killed by the Armenian fire; no close combat occurred; hence, 2 wounded on the Armenian side, 6-8 killed on the Azeri side.

Hoping that the wisdom and the patience of our people and authorities, will prevail to overcome the divisif sloganeering of the opposing parties.

Accounts differ as to who fired first. But all agree it was the most serious breach of the ceasefire in a decade, and one that could have alarming consequences if it were repeated.

[…]

The two sides agreed on these casualty figures, although according to Reuters, the Azerbaijanis also claimed that the Armenians lost 12 soldiers, which Hasratian denied.

The defence ministry of Armenia itself, which treats Nagorny Karabakh as a separate and independent entity, came out with a statement blaming the Azerbaijanis for starting the firefight.

Ministry spokesman Colonel Seyran Shahsuvarian said Azerbaijani forces seized an important defensive position held by the other side, which then responded with gunfire, regained the territory, and forced their opponents back to their original lines.

[…]

Anar Mamedkhanov, a member of Azerbaijan’s parliament, told IWPR that President Ilham Aliev was visiting that part of the country, so it would hardly have made sense to launch military operations near to where he was.

“Basic human logic would tell you that for reasons of security, it wouldn’t have been in the interests of the Azerbaijani armed forces to mount a provocation that day, since the president was in a neighbouring region that day. Why create a risk to his life?” asked Mamedkhanov.

The incident was undoubtedly the most serious of its kind in many years. Since a truce was signed in 1994, leaving Armenian forces in control of Nagorny Karabakh, there have been sporadic shooting incidents but the ceasefire has by and large held. The OSCE, the international mediating group, operates a limited monitoring mission which visits the front line periodically.

[…]

A senior OSCE official told IWPR that “the situation is very dangerous; there is a risk of escalation”, calling this “the worst incident in the last ten years”.

“Fortunately, on this occasion, there was a political decision not to escalate,” he said. “The worry is that this kind of skirmish could become a common occurrence.”

[…]

Azad Isazade, a defence expert at the Institute for War and Democracy in Baku, said ceasefire violations were fairly common at this time of year, when the snow melted and it became easier to move around. “Of course, on this occasion the shooting was on a larger scale,” he said. “But I don’t think it will lead to full-scale war.”

Other commentators in Azerbaijan, Nagorny Karabakh and Armenia tended to identify internal political factors which might have prompted the opposing side to deliberately seek a confrontation.

David Babayan, a political analyst in Nagorny Karabakh, speculated that the Azerbaijani leadership might have been probing their opponents’ defences at a time when Armenia itself is in political turmoil.

A second possibility, he suggested, was that Baku was seriously concerned that Nagorny Karabakh’s aspirations for independence had moved a step forward following the declaration of independence by Kosovo, another former autonomous territory within a Communist state.

“Azerbaijan is seriously worried about the right of nations to self-determination, and it chose to react by using force,” he said.

A common theme among analysts across the region was that the exchange of gunfire was in some way connected with the domestic political strife in Armenia, where opposition protests over the results of the February 19 presidential election ended in bloodshed on March 1. Eight people were reported dead after running battles between police and demonstrators in the capital Yerevan.

Azerbaijani political scientist Rasim Musabekov believes the administration of outgoing president Robert Kocharian and his elected successor Serzh Sarkisian stood to gain from creating a diversion to distract attention from their own problems.

Armed forces chief of staff Lt-Gen Sadigov made a similar point, saying the ceasefire was a direct consequence of Armenia’s internal troubles.

Armenia’s foreign minister Vardan Oskanian, meanwhile, accused Baku of “taking advantage of the exacerbation of the internal political situation in Armenia”.

http://www.iwpr.net/EN-crs-f-343239