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UPDATE 2-Humanitarian crisis feared as Nagorno-Karabakh ceasefire buckles

* Nagorno-Karabakh ceasefire went into effect on Saturday

* Both sides accuse each other of violating ceasefire

* Fighting is deadliest in years in long-running conflict

* Tensions in Nagorno-Karabakh: tmsnrt.rs/30GEXJd (Adds Turkey, Pompeo tweet)

YEREVAN/BAKU, Oct 13 (Reuters) - Armenia and Azerbaijan accused each other on Tuesday of violating a ceasefire agreed three days ago to quell fighting over Nagorno-Karabakh, drawing warnings from international groups of a humanitarian crisis in the region.

The Russia-brokered truce is buckling despite mounting calls from world powers to halt the fighting, with U.S. Secretary of State Mike Pompeo and the Minsk Group security watchdog among those urging greater commitment to the ceasefire terms.

A Reuters cameraman witnessed shelling in the town of Martuni in Nagorno-Karabakh, a mountain enclave which is internationally recognised as part of Azerbaijan but governed and populated by ethnic Armenians.

A Reuters television crew in Terter in Azerbaijan also said the city centre was being shelled earlier on Tuesday.

Azerbaijan accused Armenian forces of “grossly violating the humanitarian truce”, which was agreed on Saturday to allow the sides to swap prisoners and bodies of those killed. .

Defence ministry spokesman Vagif Dargiahly said Armenia was shelling the Azeri territories of Goranboy and Aghdam, as well as Terter. Azeri forces were not violating the truce, he added.

Armenian defence ministry spokeswoman Shushan Stepanyan denied the accusation. She said Azeri forces had resumed military operations after an overnight lull, “supported by active artillery fire in the southern, northern, northeastern and eastern directions”.

The fighting which erupted on Sept. 27, is the worst since a 1991-94 war over Nagorno-Karabakh that killed about 30,000.

It is being closely watched abroad, not only due to its proximity to Azeri energy pipelines to Europe but also because of fears that Russia and Turkey could be drawn in.

Russia has a defence pact with Armenia and Turkey is allied with Azerbaijan.

“CATASTROPHIC CONSEQUENCES”

The Minsk Group called on the Armenian and Azeri leaders to immediately implement the ceasefire to prevent “catastrophic consequences for the region”.

The 11-member group includes both Russia and Turkey, but the latter is not involved in the Nagorno-Karabakh talks. Turkish Foreign Minister Mevlut Cavusoglu suggested holding talks that would include Turkey.

Ceasefire demands were “reasonable”, according to Cavusoglu, but he said the international community should ask Armenia to withdraw from Azeri territory.

“Sadly no such call is being made,” he told reporters .

Influential Turkish politician Devlet Bahceli, whose party supports President Erdogan’s AKP in parliament, took a more belligerent note, telling Azerbaijan to secure Nagorno-Karabakh by “hitting Armenia over the head over and over again”.

While Turkey denies military involvement in Nagorno-Karabakh, Armenian President Armen Sarkissian told Germany’s Bild newspaper Ankara’s behaviour was worrying.

“I worry because, firstly, there is a third party involved. If it were only about Nagorno-Karabakh and Azerbaijan, I would be much more hopeful that the conflict can be contained,” he said.

DEAD AND WOUNDED

The death toll has risen further, meanwhile. Nagorno-Karabakh officials said 542 servicemen had been killed so far, up 17 from Monday.

Azerbaijan has reported 42 Azeri civilian deaths and 206 wounded since Sept. 27. It has not disclosed military casualties.

Martin Schuepp, Eurasia regional director for the International Committee of the Red Cross (ICRC), said his organisation was in “continuous discussions” to facilitate the handover of detainees or bodies of those killed.

But the security situation meant “it has not been possible for us to access all locations that might have been affected,” Schuepp said.

The conflict is also worsening the spread of COVID-19, World Health Organisation spokesman Tarik Jasarevic told a United Nations briefing in Geneva.

Armenia’s new cases had doubled over the past 14 days as of Monday, while new infections were up approximately 80% over the past week in Azerbaijan, Jasarevic said. He warned of “direct disruption to health care and a further burden on health systems that are already stretched during the COVID pandemic.”

With tens of thousands of people potentially needing help in coming months, the ICRC is appealing for another 9.2 million Swiss francs ($10.10 million) to fund its humanitarian efforts in the region, Schuepp said. ($1 = 0.9106 Swiss francs)

Additional reporting by Margarita Antidze in Tbilisi, Riham Alkousaa in Berlin, Stephanie Ulmer-Nebehay in Geneva, Tuvan Gumrukcu and Jonathan Spicer in Ankara; Writing by Sujata Rao; Editing by Giles Elgood, Timothy Heritage, William Maclean

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