Shusha—the territory's largest settlement, its centre for social and cultural life, and with a mixed population consisting mostly of ethnic Armenians and Azerbaijanis—found itself at the heart of the dispute.

The government of Azerbaijan proclaimed in Baku the annexation of the disputed territory and, on 15 January 1919, appointed Khosrov bek Sultanov,[4] as governor-general of Karabakh.

The United Kingdom had a small detachment of troops stationed in Shusha and acceded to Sultanov's appointment as provisional governor, but insisted that a final decision on the territory's ownership could only be decided at a future peace conference.

It concluded with the agreement of 22 August, according to which Nagorno-Karabakh would consider itself to be provisionally within the borders of the Republic of Azerbaijan until its final status was decided at the Peace Conference in Paris.

As the historian Richard Hovhannisyan points out, the agreement concluded in August 1919 strictly limited the Azerbaijani administrative and military presence in the region and established the internal autonomy of Nagorno-Karabakh.

[11] Matters came to a head on the evening of 22 March, when "the Varanda militia entered Shusha...supposedly to receive its pay and to felicitate Governor-General Sultanov on the occasion of Novruz Bairam," writes historian Richard G. Hovannisian.

The Varanda militiamen spent most of the night eating and drinking and were late in taking up their assigned positions, whereas Azbekian's detachment, failing to link up with the militia, began firing on the Azerbaijani fort from afar, awakening the troops and sending them scurrying to arms.

Bishop Vahan (Ter-Grigorian), who had sought a policy of accommodation with the Azerbaijani authorities, was murdered and beheaded, his "head paraded through the streets on a spike.

[19] Former minister of internal affairs of Azerbaijan Behbud Khan Javanshir was assassinated during Operation Nemesis by members of the Armenian Revolutionary Federation, who suspected him of involvement in the massacre.

[20] The prominent Russian poet Osip Mandelstam, who visited Shusha in 1930, wrote the poem "The Phaeton Driver" (1931) in memory of the massacre and burning: So in Nagorno-Karabakh These were my fears Forty thousand dead windows Are visible there from all directions, The cocoon of soulless work Buried in the mountains.

[21][22][23] Visiting Shusha with Osip, Nadezhda Mandelstam wrote, "in this town, which formerly, of course, was healthy and endowed with every amenity, the picture of catastrophe and massacres was terribly vivid ...