Armenia said a Turkish F-16 fighter jet shot down one of its warplanes over Armenian airspace on Tuesday, killing the pilot, but Turkey called the claim "absolutely untrue".
Any such incident would mark a potentially major escalation of conflict in the South Caucasus region.
Turkey is a close ally of Azerbaijan, which is fighting ethnic Armenian forces in a major new flare-up of a decades-old conflict over the territory of Nagorno-Karabakh.
An Armenian defence ministry spokeswoman said the Armenian Sukhoi Su-25 warplane had been on a military assignment when it was downed by an F-16 fighter jet owned by the Turkish air force.
Turkey's communications director Fahrettin Altun said: "Armenia should withdraw from the territories under its occupation instead of resorting to cheap propaganda tricks."
Azerbaijan's defence ministry also denied that a Turkish fighter jet had shot down an Armenian plane.
Dozens of people have been reported killed and hundreds wounded since clashes between Azerbaijan and its ethnic Armenian mountain enclave of Nagorno-Karabakh broke out on Sunday, quickly escalating into the worst fighting since the 1990s.
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Nagorno-Karabakh is a breakaway region that is inside Azerbaijan but is run by ethnic Armenians and is supported by Armenia. It broke away from Azerbaijan in a war in the 1990s, but is not recognised by any country as an independent republic.
An all-out war could drag in major regional powers Russia and Turkey. Moscow has a defence alliance with Armenia, which is the enclave's lifeline to the outside world, while Ankara backs its own ethnic Turkic kin in Azerbaijan.
The Kremlin said earlier that Moscow was in constant contact with Turkey, Armenia and Azerbaijan over the conflict. Any talk of providing military support for the opposing sides would only add fuel to the fire, it said.