Armenian leader Nikol Pashinyan has accused the military of an attempted coup and urged his supporters to take to the streets on Thursday as the country's biggest opposition party told him to resign and avert civil war.

Tensions have been simmering for months over Pashinyan's handling of last year's war with Azerbaijan.

"We call on Nikol Pashinyan not to lead the country towards civil war and to avoid bloodshed. Pashinyan has one last chance to avoid turmoil," the Prosperous Armenia opposition party has said in a statement.

The country's top military staff demanded on Thursday the prime minister resign, setting off a potential power struggle in the Caucasus nation.

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Pashinyan denounced the statement as a coup attempt and called on his supporters to demonstrate.

"I consider the statement of the general staff of the armed forces an attempted military coup. I invite all of our supporters to Republic Square right now," he wrote on Facebook, referring to a central square in the capital Yerevan.

Pashinyan also fired the head of the general staff Onik Gasparyan, whose office had released the statement following the prime minister's sacking of deputy armed forces chief of staff Tigran Khachatryan on Wednesday.

Khachatryan had ridiculed claims by Pashinyan that Iskander missiles supplied by Russia – Armenia's main military ally – had failed to hit targets during the war with Azerbaijan over the disputed Nagorno-Karabakh region.

The general staff statement said the firing was made "exclusively on the basis of the personal feelings and ambitions" of Pashinyan.

The statement also said Pashinyan and his government "are not capable of taking adequate decisions," and denounced "attacks by the authorities aimed at discrediting the armed forces."

Kremlin spokesman Dmitry Peskov said Moscow was concerned by the events in Yerevan and called for calm.

Turkey's Foreign Minister Mevlut Cavusoglu told a news conference in Budapest: "We strongly condemn the attempted coup in Armenia.

"We are absolutely against coups and coup attempts anywhere in the world."

Pashinyan has been under pressure since he signed a peace deal brokered by Russia that ended the conflict over Karabakh, an ethnic Armenian region that broke away from Azerbaijan's control during a war in the early 1990s.

Fresh fighting erupted over the region in late September with Azerbaijani forces backed by ally Turkey making steady gains. 

After six weeks of clashes and bombardment that claimed around 6,000 lives, a ceasefire deal was signed that handed over swathes of territory to Azerbaijan and allowed for the deployment of Russian peacekeepers.

Azerbaijan regained control of several regions around Karabakh that its separatist forces had seized in the 1990s war and the strategically and symbolically important town of Shusha.

The agreement was seen as a national humiliation for many in Armenia, though Pashinyan has said he had no choice but to agree or suffer even bigger losses.

It was met with protests in Yerevan, where demonstrators stormed government offices on the night it was signed and have continued to regularly gather.

Pashinyan has rejected calls to resign and for early elections despite the building pressure.

The 45-year-old former newspaper editor came to power spearheading peaceful protests in 2018 and initially brought a wave of optimism to Armenia, which has borders with Iran, Georgia and Turkey.

But his handling of the war has provoked criticism from political opponents including former leader Serzh Sarkisian, who was forced to resign in 2018.