"The ceasefire was largely observed overnight along the Karabakh frontline," the Armenia-backed separatist defense ministry in Karabakh said in a statement.
Azerbaijan's defense ministry said its forces were "strictly abiding by the ceasefire agreement" that was hammered out on Tuesday by the Azerbaijani and Armenian army chiefs during a meeting in Moscow.
Armenia's defense ministry spokesman Artsrun Hovhannisyan said that sporadic shooting continued on Wednesday "including from tanks, but not as intensive" as during the last days.
An AFP photographer in the village of Matagis in Karabakh, some 10 kilometers (six miles) from the frontline, confirmed that "the night was calm and without shooting."
A Karabakh army officer told the photographer that "occasional shooting has been a normal thing on the frontline for years."
"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.
"Azerbaijani troops are currently reinforcing the liberated territories," Baku's defence military said in its statement.
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 on Tuesday.