26 01 2007 - "The potential for conflict is still very high," Putin said at a joint news conference with Kocharyan.

Armenia's foreign minister and his Azeri counterpart held inconclusive talks in Moscow on the status of the mountainous territory inside Azerbaijan that is controlled by ethnic Armenian forces.
"The potential for conflict is still very high," Putin said at a joint news conference with Kocharyan.

Repeated efforts by international mediators, including Russia, France and the United States, to resolve the dispute over Nagorno-Karabakh have failed, and the lack of resolution has tied up development in the energy-rich South Caucasus.
"We have problems with Azerbaijan on the Nagorno-Karabakh settlement. We are conducting active egotiations," Kocharyan said. "The most important factor is that the cease-fire introduced in the region in 1994 has remained effective until now. This proves the intentions of the parties to adhere to
the peaceful process within the framework of the [Organization for Security and Cooperation in Europe]."

Armenia is Russia's closest ally in the South Caucasus, and in recent years it has turned over a substantial part of its energy infrastructure and network to Russian companies.

V.V