Clashes between security forces and protesters have been reported in the northern Azerbaijani town of Quba. RFE/RL says that the fighting broke out when videos surfaced of local governor Rauf Habibov calling local residents "traitors" because they sold land to Azeris from other parts of the country. His comments were a response to whistleblowing allegations of graft against the governor.
Habibov met with protesters but refused to step down, and large crowds gathered and began clashing with security forces who responded with tear gas and water cannon. At least four people have been injured and the governor's house apparently burnt. RIA Novosti has the number of demonstrators at 10,000 although this seems inflated - footage and other reports suggest a few hundred, which seems more likely given that the population of the town is estimated at just 38,000 (stats available here).
In any case it seems the government is taking no chances, rushing special police forces up from Baku to stamp out the clashes. The unrest is the most serious in Azerbaijan in years, and the shadow of events in the Middle East is undoubtedly in the back of official minds right now. It may not fit the context of the Former Soviet Union, but if protesters feel angry and governments feel alarmed then both may start to view things through that lens if things get out of control.
Given that this is an apparently localised dispute, and given the government's grip on the security apparatus, the unrest is likely to be tamped down in short order (as Azeri media are already suggesting). This is not an insurrection against the national authorities: one protester, for instance, is outraged at the label of "traitor" because "Quba residents have always supported our state". But whatever the outcome, the level of anger over official corruption and scorn towards the public is something to note.
The government is fairly agile and is likely to swing into action - expect Habibov to be sacked and inquiries launched. In Kazakhstan, the government demonstrated after the Zhanoezen unrest in December that a swift and overwhelming response to unrest - using the full range of security, judicial, economic and social instruments - can stop local disputes from spreading. The odds are that President Aliyev will take Nursultan Nazarbayev, not Hosni Mubarak, as his model in reacting to this crisis.