A handout picture shows rescue teams working at a site hit by a missile in the city of Ganja, Azerbaijan, on Saturday. AFP

Azerbaijan on Saturday accused Armenia of striking its second-largest city with a ballistic missile that killed at least 13 civilians and wounded 50 others in a new escalation of their conflict over Nagorno-Karabakh.

The Armenian Defense Ministry denied launching the strike, but the separatist authorities in Nagorno-Karabakh put out a statement listing alleged "legitimate” military facilities in the city of Ganja, although they stopped short of claiming responsibility for the attack.

Azerbaijani officials said the Soviet-made Scud missile destroyed or damaged about 20 residential buildings in Ganja overnight, and emergency workers spent hours searching in the rubble for victims and survivors.

Scud missiles date back to the 1960s and carry a big load of explosives but are known for their lack of precision.

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In a televised address to the nation, Azerbaijan’s president, Ilham Aliyev, denounced the missile strike as a war crime and warned the leadership of Armenia that it would face responsibility for that.

"Azerbaijan will give its response and it will do so exclusively on the battlefield,” Aliyev said.

Relatives of Royal Sahnazarov mourn during a funeral in the city of Ganja, Azerbaijan, on Saturday. Reuters

While authorities in both Azerbaijan and Armenia have denied targeting civilians, residential areas have increasingly come under shelling amid the hostilities that have raged for three weeks despite Russia's attempt to broker a cease-fire.

Stepanakert, the regional capital of Nagorno-Karabakh, came under intense shelling overnight, leaving three civilians wounded, according to separatist authorities.

Nagorno-Karabakh lies within Azerbaijan but has been under the control of ethnic Armenian forces backed by Armenia since a war there ended in 1994. The latest outburst of fighting began on Sept. 27 and has involved heavy artillery, rockets and drones, killing hundreds and marking the largest escalation of hostilities between the South Caucasus neighbors in more than a quarter-century.

Aliyev announced Saturday that Azerbaijani forces have taken the town of Fizuli and seven villages around it, gaining a "strategic edge.”

Fizuli is one of the seven Azerbaijani regions outside Nagorno-Karabakh that was seized by the Armenian forces during the war in the early 1990s.