BAKU   -  Azerbaijan said Sunday its forces had captured the key town of Shusha from Armenian separatists in Nagorno-Karabakh, but Armenia insisted that fighting for the strategically vital area was ongoing.

The capture of Shusha would be a major victory for Azerbaijan six weeks after new fighting erupted over Nagorno-Karabakh, an ethnic Armenian enclave that broke away from Azerbaijan's control in the 1990s.

The fortress town sits on cliffs around 15 kilometres (nine miles) from Nagorno-Karabakh's largest city Stepanakert and on the main road through the region to the territory of Armenia, which backs the separatists.

Both sides have reported fierce clashes around the town in recent days, after Azerbaijani forces swept across the southern flank of Nagorno-Karabakh and pushed through its mountain passes.

In a televised address to the nation on Sunday, Azerbaijani President Ilham Aliyev announced that the town had been captured. "With great pride and joy, I inform you that the town of Shusha has been liberated," said Aliyev, dressed in military fatigues and standing in front of an Azerbaijani flag.

He said November 8 would "go down in the history of the Azerbaijani people" as the day "we returned to Shusha," "Our liberation march continues. We will go to the end, until the complete liberation of the occupied territories," Aliyev said.

Celebrations in Baku -

Flag-waving Azerbaijanis celebrated in the capital Baku after Aliyev's announcement, with cars honking their horns as residents crowded along city streets. 

Armenian officials confirmed there were heavy clashes for the town but said the battle was far from over.

"The fighting continues in Shushi, wait and believe in our army," Armenian defence ministry official Artsrun Hovhannisyan said, using the Armenian name for the town, shortly after Aliyev's announcement.