According to local ethnic-Armenian officials, an explosion at a gasoline storage in Nagorno-Karabakh killed 20 people and wounded hundreds more.
Almost 300 individuals were brought to hospitals, with scores of them in severe condition.
It comes as the Armenian government announced that 19,000 refugees have entered the nation from the enclave since local forces surrendered to Azerbaijan.
Around 120,000 ethnic Armenians live in the contested territory.
It is still unclear what triggered the explosion on Monday evening in Khankendi, often known as Stepanakert by Armenians.
Petrol stations have been overwhelmed as thousands try to leave the region, which was already suffering from a fuel shortage following a months-long blockade.
The only road connecting Armenia to the enclave remains backed up with hundreds of cars and buses, filled with ethnic Armenians trying to reach the town of Goris across the border.
The winding mountain road from Goris to Armenia’s capital, Yerevan, has also been heavy with traffic from well before dawn.
A BBC team saw families crammed into cars, boots overflowing, and roof-racks piled high with belongings. Convinced they are leaving their homes for good; people are squeezing as much of their lives as possible into their vehicles.
Inside Goris, a small town that is the same dusty brown as the jagged mountains that surround it, the narrow streets are filled with more cars and more families. One has arrived in a car held together with little more than sticking tape, its side badly dented and dotted with shrapnel holes, and windows smashed.
The owner tells the BBC it was hit by mortar fire when Azerbaijan launched a lightning assault to take control of the region last week. “But it still got us here,” he smiles, surrounded by small children.