"The ceasefire was largely observed overnight along the Karabakh frontline," the Armenia-backed separatist defence ministry in Karabakh said in a statement.
Azerbaijan's defence ministry said its forces were "strictly abiding by the ceasefire agreement" that was hammered out yesterday by the Azerbaijani and Armenian army chiefs during a meeting in Moscow.
Armenia's defence ministry spokesman Artsrun Hovhannisyan said that sporadic shooting continued today "including from tanks, but not as intensive" as during the last days.
A Karabakh army officer told the photographer that "occasional shooting has been a normal thing on the frontline for years."
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"It doesn't mean that the ceasefire failed."
The fragile truce comes after at least 75 people were reported killed as the festering dispute over the territory -- which was captured from Azerbaijan by Armenian separatists in an early 1990s war -- escalated dramatically on Friday, sparking international concern.
Azerbaijan's army claimed to have snatched control of several strategic locations inside Armenian-controlled territory, effectively changing the frontline for the first time since an inconclusive truce ended the war in 1994.
Yerevan, however, insists that the Azeri side has been ousted from any positions it might have snatched inside the disputed territory.
"Even if certain Armenian positions were at some point taken by Azeris, now they are all returned under Karabakh's control," Hovhannisyan, Armenia's defence ministry spokesman, told AFP yesterday.
In a bid to cement the truce, mediators have set out to the region to shuttle between the two warring sides in a flurry of diplomacy.
The US, French and Russian ambassadors to the Organisation for Security and Cooperation in Europe (OSCE) -- who co-chair the so-called "Minsk Group" which has long mediated Karabakh peace talks -- today met with Azerbaijan's President Ilham Aliyev in Baku.
Armenian President Serzh Sarkisian was headed to Germany Wednesday for a long-planned visit that will see him meet Chancellor Angela Merkel for talks that are sure to focus on the surge in fighting in Karabakh.