Dozens of Armenian protesters on Thursday blocked several roads across the country, including in the capital Yerevan, angry at what they see as territorial concessions to arch-foe Azerbaijan, local media reported.

The latest flare-up comes after the two Caucasus countries this week began physical demarcation of a contested border section in a bid to move closer to an elusive peace deal after three decades of tension and conflict.

Armenian Prime Minister Nikol Pashinyan has agreed to return four abandoned villages that Yerevan seized in the 1990s.

But locals in nearby settlements say that could cut them off from the rest of the country and accuse Pashinyan of unilaterally giving away territory without any guarantees in return.

Demonstrations continued on Thursday against the move.

Protestors blocked the main highway to Georgia, a major street in the capital and other roads across the country.

The main north-south thoroughfare was blocked near the village of Tigranashen -- recognised as an Azerbaijani exclave but controlled by Armenia -- local media outlets reported.

In the capital Yerevan, police were filmed making arrests as they tried to clear protestors off the road.

The region where Armenia has agreed to hand back some villages is of strategic importance for the landlocked country.

It includes parts of the highway to Georgia -- vital for the country's foreign trade -- as well as a Russian gas pipeline and has advantageous military positions.

Yerevan has insisted it will not transfer "sovereign territory," and Pashinyan has defended his decision to return the four frontier villages as aiming to "prevent a war" with Baku.

Azerbaijani President Ilham Aliyev said Tuesday a peace deal between the countries was "closer than ever before".

The ex-Soviet republics fought two wars in the 1990s and 2020 for control of the then-contested breakaway region of Nagorno-Karabakh.

Baku recaptured it last September in a lightning offensive, ending three decades of rule by Armenian separatists and prompting more than 100,000 locals to flee into Armenia.