People carry lit candles as they gather in central Baku on February 25, 2015 to commemorate the Khojaly massacre in 1992 in which ethnic Azerbaijanis were killed by Armenians during the Nagorno-Karabakh Wa
Peaceful protest: people gathered in Baku last month to commemorate those killed during the war with Armenia

The “frozen conflict” between Azerbaijan and Armenia over the territory of Nagorno-Karabakh is heating up, erupting in regular bursts of violence that threaten regional stability and risk triggering ripple effects beyond the southern Caucasus.

January’s casualty toll of 12 killed and 18 wounded was the highest confirmed number of victims in the first month of a year since a ceasefire halted a 1992-94 war between the two former Soviet republics. That conflict killed at least 20,000 people and turned more than 1m into refugees.

The latest clashes are on a less frightful scale, but international monitors say the 2014 death toll of about 60 people was the worst for 20 years. “The risks are increasing. The nature of the confrontation on the front line is becoming more dangerous. It’s not just snipers any more. It’s attack helicopters, artillery and more,” says one European official.

Serzh Sargsyan and Ilham Aliyev, the Armenian and Azerbaijani presidents, met on three occasions between August and October 2014 for talks brokered by Russia, then the US, then France. But none of these meetings advanced the prospects for a lasting peace settlement.

Instead, military expenditure, political intransigence and state-fuelled propaganda are intensifying on both sides of a dispute that concerns the EU, Russia, Turkey and the US, not least because oil and gas pipelines important to Europe’s energy security lie close to the Karabakh front line.

Mr Aliyev and his government are displaying more frustration with the lack of diplomatic progress than for many years. At February’s annual Munich security conference, he complained that western powers were guilty of double standards, by imposing sanctions on Russia for its actions in Ukraine, yet taking no meaningful steps to secure Armenia’s compliance with UN resolutions that call for its withdrawal from Azerbaijani land.

Azerbaijan has increased military spending over the past decade so that it is now double the size of Armenia’s entire state budget. Among Baku’s main arms suppliers are Israel and Russia.

In commercial, military and political terms, however, Armenia is more closely aligned with Moscow. Russia’s 102nd Military Base is located at Gyumri, Armenia’s second city. In January Armenia, unlike Azerbaijan, joined Russian president Vladimir Putin’s cherished Eurasian Economic Union, which unites Russia with several other former Soviet republics.

Having seized control of Karabakh and seven adjacent districts from Azerbaijan in the 1992-94 war, Armenia now relies heavily on its economic and security relationship with Russia to deter any attempt by Baku to reclaim its lost territories by full-scale war.

What is unclear is how Russia might react if Azerbaijan launched an attack but took care to confine its forces strictly to its side of the internationally recognised border with Armenia.

For Baku, a related consideration is the exposed position of Nakhchivan, an autonomous exclave that is vulnerable to Armenian pressure because Armenian land, next to the occupied territories, cuts it off from the rest of Azerbaijan to the east. Russia and Turkey view themselves as guarantors of Nakhchivan’s status.

With the US and France, Russia leads the Minsk Group, which, under the auspices of the Organisation for Security and Co-operation in Europe (OSCE), has tried without success to broker a Karabakh settlement for 22 years. Moscow’s alliance with Armenia, its arms sales to Azerbaijan and its 2008 military strike in Georgia, which resulted in that republic’s de facto dismemberment at Russia’s hands, raise questions about the Kremlin’s true intentions in the Minsk Group. However, western officials say acute tensions between Russia and western governments over Moscow’s annexation of Crimea and intervention in eastern Ukraine have not hindered co-operation on Karabakh.

Nagorno-Karabakh (which means “mountainous black garden”), a mainly Armenian-populated enclave of Azer­baijan in Soviet times, is today, for most practical purposes, an appendage of Armenia. However, like the Turkish Cypriot breakaway state in northern Cyprus, Karabakh is isolated in the international community. Its officials are excluded from the peace process, being represented by Armenia — a shut door at which they chafe.

Since 2007, mediators have tried to build an agreement on the so-called Madrid Principles, which foresee a phased Armenian withdrawal from most of the occupied lands around Karabakh and an eventual popular vote on the region’s status. At bottom, it may be that neither Armenian nor Azerbaijani society is psychologically ready for the concessions necessary to achieve a non-military solution.

“Given the breadth and depth of the propaganda on both sides, the younger generations may not be receptive to compromise,” says an official from an OSCE nation.

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