BARDA, Azerbaijan (AP) _ Refugees streamed past burning houses on the outskirts of the southern Caucasus town of Agdam, the new front line in the war between Azerbaijan and Armenian rebels, relief workers said today.

Armenian forces launched an attack on the town Sunday in their continuing drive beyond the mainly Armenian enclave of Nagorno-Karabakh, into Azerbaijan proper. The enclave is at the heart of the five-year dispute between the two former Soviet republics.

The fighting around Agdam, several miles east of Nagorno-Karabakh, continued into the night but apparently quieted down before dawn.

The town's fall would mark a significant new loss for Azerbaijan's army, which has been plagued by low discipline, bad morale and desertion.

''The Armenians are very strong. We have lost hope. Our discipline is zero. We don't know how long we can last,'' said Tumas Aliev, mayor of the besieged city of Fizuli, about 30 miles south of Agdam and the scene of heavy fighting in recent months.

Armenians recently seized the last Azerbaijani positions in Nagorno- Karabakh, and their latest attacks appear aimed at ending the government's ability to strike at them from positions outside the enclave.

Red Cross delegate Hans-Peter Lenz said today in Barda, about 28 miles north of Agdam, that he visited Agdam the previous night and saw houses outside the city on fire and refugees camping along the roads outside town.

He said they told him more than 70 people had been injured in shelling and were being treated at Agdam's hospital. Those fleeing said missiles were falling on the town and some buildings had been destroyed, Lenz said.

In a telephone conversation with The Associated Press, Asif Kerimov, deputy mayor of Agdam, said the Armenians were only about 500 yards from town.

''They are shelling residential areas and four women were killed'' Sunday, he said. ''We are getting some troop reinforcements but very slowly and we have received no tanks.''

Acting President Geidar Aliev, a former Communist boss who took power last month when Azerbaijan's elected president fled a military revolt, said he had spoken several times with Armenian leaders in recent days ''and asked for a cease-fire.''

But Aliev said Armenian President Levon Ter-Petrosian told him he had no control over ethnic Armenian fighters in Nagorno-Karabakh.