Armenia's Prime Minister Nikol Pashinyan defied calls to resign and accused the military of an attempted coup on Thursday, as divisions over his handling of last year's war with Azerbaijan brought thousands to the streets.

Hours after the general staff of Armenia's military made a shock call for the government to step down, Pashinyan rallied some 20,000 supporters in the centre of the capital Yerevan against what he said was an attempt to oust him.

The opposition gathered some 10,000 of its own supporters not far away, then began putting up tents and building barricades outside parliament as it vowed to hold round-the-clock demonstrations.

There were no signs of any military action against Pashinyan, who ordered the armed forces to stand behind the government.

"I am ordering all generals, officers and soldiers: do your job of protecting the country's borders and territorial integrity," he said during the rally.

The army "must obey the people and elected authorities," Pashinyan said.

The defence ministry also issued a statement declaring that "attempts to involve (the military) in political processes are unacceptable."

Pashinyan said he was ready to start talks with the opposition, but also threatened to arrest any opponents who "go beyond political statements".

The prime minister has been under intense pressure over his handling of the conflict for control of the disputed Nagorno-Karabakh region, but has ignored repeated calls to resign for losing swathes of territory to Azerbaijan.

- Opposition warns of 'bloodshed' -

After backing the prime minister for months, the military's general staff on Thursday joined calls for him to step down, saying in a statement that he and his cabinet "are not capable of taking adequate decisions".

Pashinyan hit back with an accusation that top brass were mounting an "attempted military coup" and ordered the firing of the chief of the general staff Onik Gasparyan.

Pashinyan then led supporters through the streets of the capital, surrounded by his family, ministers and security detail, as marchers chanted "Nikol Prime Minister!"

He attempted to downplay the military statement, saying it had been an "emotional reaction" to his firing the previous day of the deputy chief of the general staff, Tigran Khachatryan.

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 over Nagorno-Karabakh.

But Armenia's opposition urged him to heed the demand.

"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," Prosperous Armenia, the country's largest opposition party, said in a statement.

Prosperous Armenia and another opposition party, Bright Armenia, called for the holding of an extraordinary session of parliament, which is controlled by Pashinyan's allies.

Their supporters had gathered outside parliament in the early evening, blocking traffic, erecting tents and making barricades out of rubbish bins.

"We will bring tents, stoves, everything we need. We are staying here. The lawmakers can either come or we will bring them to parliament," said Ishkhan Saghatelyan of the opposition Armenian Revolutionary Federation, also known as Dashnaktsutyun.

President Armen Sarkisian, whose role is largely symbolic, said he was taking urgent steps to try to defuse the crisis, while Armenia's Apostolic Church called for all sides to hold talks "for the sake of our homeland and people".

- Call with Putin -

Russian President Vladimir Putin spoke to Pashinyan and "called on all parties to show restraint," the Kremlin's spokesman said.

The United States, which under President Joe Biden has redoubled efforts to support democracy, warned the military and urged all sides to avoid violence.

"We remind all parties of the bedrock democratic principle that states' armed forces should not intervene in domestic politics," State Department spokesman Ned Price said.

The European Union's spokesman also called on the armed forces to "maintain neutrality in political matters" in line with Armenia's Constitution.

Pashinyan has faced fierce criticism since he signed a peace deal brokered by Russia that ended the conflict over Nagorno-Karabakh, an ethnic Armenian region that broke 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 bombardments that claimed some 6,000 lives, a ceasefire agreement was signed that handed over significant territory to Azerbaijan and allowed for the deployment of Russian peacekeepers.

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

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