Azerbaijan has declared a no-fly zone throughout the Nagorno-Karabakh Republic (NKR), a breakaway Azerbaijani region predominantly controlled by ethnic Armenians.
The move comes a day after the Azerbaijani Armed Forces shot down an Armenian military Russian-built Mi-24 helicopter gunship in the region.
The Azerbaijani Foreign Ministry said in a statement: "Azerbaijan announces that the airspace above the occupied territories is closed for flights and, in line with the established procedures, has informed all the members of the International Civil Aviation Organization (ICAO) of this.
"The illegal penetration of the Azeri airspace by Armenian military helicopters is an act of ongoing occupation and aggression against Azerbaijan and a policy of encroachment on territorial integrity and sovereignty of the republic."
The Armenian Defence Ministry claimed that the Mi-24 helicopter belonged to Nagorno-Karabakh, and was gunned down near the ceasefire line during a training mission.
However, Azerbaijan insisted that the helicopter tried to attack positions of the Azeri Army near the Agdam district, and was shot down in return fire, killing three pilots.
Armenia promised 'painful' consequences for Azerbaijan in retaliation for the incident, fuelling fears of a major escalation of the long-standing conflict over Nagorny Karabakh.
Armenian Foreign Ministry spokesperson Artsrun Hovannisyan was quoted by Agence France-Presse as saying: "This is an unprecedented escalation and the consequences for Azerbaijan will be grave.
"Azerbaijan's claim that the Armenian helicopter attacked its positions is not true. Examination of the wreckage will prove that the helicopter carried no weapons."
Meanwhile, the Organisation for Security and Cooperation in Europe (OSCE) called on Armenia and Azerbaijan to honour their 20-year-old truce that aims to settle the dispute.
The OSCE said in a statement: "The OSCE Chairperson-in-Office and Swiss Foreign Minister, Didier Burkhalter, expressed his deep concern about yesterday's downing of a helicopter near the line of contact.
"He appeals to the presidents of Azerbaijan and Armenia to do their utmost to prevent such incidents and to honour the ceasefire regime."