"Neither war nor peace" is precisely how the current situation between Yerevan and Baku is best described. Almost a year after the forced displacement of 120,000 Armenians from Nagorno-Karabakh, there are no active gunfire exchanges along the Armenia-Azerbaijan border, but a tough diplomatic struggle is ongoing. 

Following the 44-day war, Azerbaijan gained control of Nagorno-Karabakh, and seven surrounding districts, and seized 200 to 300 square kilometres of Armenia's territory, but still today it refuses to sign a peace treaty. 

The only achievement Yerevan aspires to secure is President Ilham Aliyev’s signature on a treaty. Realising the importance of this for Prime Minister Nikol Pashinyan's government, Baku has demanded that Armenia change its constitution, making this the main condition for signing a peace treaty. 

Yerevan rejects Azerbaijan’s demand to amend its constitution, calling it an attempt to interfere in its internal affairs. Instead, Armenia proposes signing the treaty today with the agreed "13+3" articles, leaving the unresolved issues for future discussions.

On October 31, Armenia’s Foreign Minister Ararat Mirzoyan announced that to expedite the peace process, the Armenian side had proposed to remove Yerevan’s and Baku’s proposals from the draft document. However, the Azerbaijani side rejected this offer. 

Mirzoyan expressed cautious optimism that Yerevan and Baku would soon reach an agreement on the remaining 1-2 formulations, after which the treaty would be ready for signing. 

However, Azerbaijan’s Foreign Minister Jeyhun Bayramov stated on the same day that, despite significant negotiation progress, he continues to assert that the main obstacle remains "Armenia’s territorial claims over Azerbaijan" embedded in its constitution. In other words, Baku will continue to demand that Yerevan amend its constitution.

US plans creative approaches

The US has been very active recently in an attempt to bring the parties closer to signing a treaty. The initiative has been taken over by President Joe Biden, who has only months left in his presidency. Biden sent his assistant, Michael Carpenter, to Baku and Yerevan, delivering his letter to both Aliyev and Pashinyan. 

In his letter to Aliyev, Biden stated that the peace treaty would guarantee Azerbaijan’s sovereignty and territorial integrity, and would also transform the entire region by paving the way for increased trade, investments, and communication between Europe and Central Asia. 

President Biden emphasised that with the COP29 climate summit approaching, Aliyev has a unique opportunity to demonstrate his commitment to peace in front of the international community. The U.S. hopes that the unresolved articles of the treaty will be agreed upon by the end of the year through compromise and creative approaches. 

Aliyev, who met with the U.S. official, insisted that the main obstacle to signing the peace treaty was still the "territorial claims against Azerbaijan" enshrined in Armenia’s constitution.

The U.S. does not share Baku’s interpretation. Diplomatic sources say that American experts have studied Armenia’s constitution and concluded that the legislation does not contain territorial claims against Baku. 

Recently, Armenia’s constitutional court also published a ruling stating that the Declaration of Independence, the foreword of the constitution which includes the 1989 provision on the reunification of Nagorno-Karabakh with Armenia, has no legal force.

However, since Baku’s goal is to derail the signing of the treaty with any pretext, it does not accept this guarantee from Yerevan. Baku’s public argument is that they want to sign a treaty not with Pashinyan, but with Armenia, as "if a new government comes to power in Armenia, it may conclude that the peace treaty contradicts Armenia’s constitution, and the new government may declare the treaty invalid”, according to Azerbaijan’s Special Representative Elchin Amirbekov.

This is, to say the least, an unfounded claim since international treaties take precedence over Armenian law. Moreover, Armenia’s legal framework, through the constitutional court, has already established that Karabakh is Azerbaijani territory.

Meanwhile, Armenia has nothing left to concede. The last concession was made by Pashinyan’s government in April-May when four villages in the Tavush and Gazakh regions were handed over to Azerbaijani control. In return, Armenia did not regain even one square kilometre of its occupied territory. Pashinyan’s unilateral concession has sparked months of fierce protests by nationalist opposition in Yerevan’s streets. 

Pashinyan’s government made this unilateral concession to bring the peace treaty closer and to avoid giving Azerbaijan an excuse to start a war and disrupt the treaty’s signing. But of course, Baku’s list of demands is always full, and new demands keep being made. President Aliyev’s authoritarian approach is that Armenia is a capitulating country and must accept the humiliating terms imposed by military force.

Pashinyan, despite having sufficient grounds, does not present his own demand for Azerbaijan to amend its constitution, knowing that it would just lead the process into  deadlock. Azerbaijan has proclaimed itself as the successor of the First Republic of Azerbaijan, which existed from 1918 to 1920, and declared that Armenia’s current eastern, southern, and northern regions are part of its territory.

Pashinyan insists that this issue can be resolved with the already agreed point in the treaty, which states that the internal legislation of the countries cannot be a basis for avoiding the implementation of the treaty.

Aliyev waits on Trump

Pashinyan’s constructive steps, which put the existence of his political power at risk in Armenia, have certainly been positively evaluated by Biden. In a letter to Armenia’s prime minister, Biden wrote that Pashinyan "has courageously and consistently chosen the path of peace by placing patriotism above politics”. 

The U.S. president encouraged the leaders of both countries to finalise the treaty this year. The Biden administration has expressed its willingness to undertake bold initiatives that will help pave the way toward peace.

During a meeting in Yerevan, Biden’s assistant, Michael Carpenter, informed Pashinyan about "certain steps the U.S. intends to take and seeks Armenia’s opinion on discussions with Azerbaijan”. I believe the U.S. will try to propose interim solutions aimed at the signing of the treaty.

Undoubtedly, Biden wants to secure a diplomatic victory by resolving the Armenia-Azerbaijan conflict, an issue that has eluded dozens of American and European presidents. The U.S. president wishes to host the signing of the treaty in Washington, as an example of the Democratic Party’s foreign policy success to show American voters. This could also give a boost Democratic candidate Kamala Harris, who is running in the U.S. presidential race.

However, the signing of the treaty during Biden’s administration is not part of Aliyev’s plans. He is waiting for the outcome of the U.S. elections on November 5. If Donald Trump is elected president of the U.S., the likelihood of war being resumed by Azerbaijan will increase, and the signing of a treaty may become impossible. 

The Biden administration has so far not subjected Baku to harsh pressures or sanctions, despite its destructive stance. Aliyev started the war against Nagorno-Karabakh in 2020 when Trump was president of the U.S. The latter had weakened the U.S.’s position in the South Caucasus, and Russia, Turkey, and Azerbaijan reached a consensus on starting the war.

There is a likelihood that Trump will once again minimise the U.S. policy in the South Caucasus. Aliyev’s calculation may be that the U.S.’s passivity will stimulate Russia’s activism, and Putin will encourage Baku to carry out military attacks against Armenia to put the “Zangezur corridor” across Armenia to its exclave Nakhchivan under Russian control. 

Azerbaijan and Russia have overlapping interests, and it can be concluded that by failing to sign the treaty, Aliyev is buying strategic time, waiting for Russia to stabilise the situation on the Ukrainian front and return to the South Caucasus, intensifying pressure on Armenia. Aliyev is more comfortable when, besides himself, Putin is also putting pressure on Armenia at the negotiating table, demanding the “Zangezur corridor”,

Aliyev also has internal reasons for rejecting Biden’s letter and failing to sign the treaty. The permanent fear of war with Armenia consolidates Azerbaijani society around Aliyev’s dictatorial regime. Anti-Armenian sentiment in Azerbaijan has been state policy for decades. Aliyev  used the demonisation of Armenians and the policy of deepening hostility to prepare the Azerbaijani people for war against Karabakh. Now, after the collapse of Karabakh, Aliyev’s administration is promoting the “Armenian revanchism” thesis, using it to scare Azerbaijanis with an “imminent war” by Armenia. 

Aliyev declared a month ago that revanchist forces in Armenia are on the rise, supposedly forcing Azerbaijan to allocate large sums to the military budget. It has reached $5bn, which is close to Armenia’s entire state budget ($6.7bn). 

If, before September 19, 2023, Aliyev was consolidating Azerbaijan with the narrative of “liberating Karabakh from Armenian occupation”, today, with Karabakh under Azerbaijani control, Aliyev is introducing a new legend to Azerbaijanis: the “return to Western Azerbaijan”. 

A committee on this issue has even been formed in the Milli Mejlis (parliament). The Western Azerbaijan legend was circulated by Azerbaijanis displaced from Armenia in the 1990s, but it is now becoming state policy. At its core, it presents a territorial claim against Armenia. In other words, Aliyev is not content with just failing to sign the treaty; he is also officially formulating territorial claims against Armenia.

Today, Aliyev labels Armenia’s current territory as Western Azerbaijan to consolidate Azerbaijanis around him, to explain why they must continue living in economically unsatisfactory conditions, why they must tolerate massive human rights violations, and why Azerbaijani prisons must remain full of political prisoners. If Aliyev signs a treaty with Armenia, this mechanism of maintaining power, based on hatred of Armenians, will collapse. Essentially, the half-century-long rule of the Aliyev dynasty in Azerbaijan would be endangered.

Risk of future conflict

Moreover, there is a significant risk that after the COP29 climate summit, Azerbaijan will launch a military aggression against Armenia. Days after Aliyev’s statements accusing Pashinyan’s government of revanchism, Azerbaijani Defence Minister Zakir Hasanov held consultations with the military. The Azerbaijani minister ordered preparation to counter “revanchist provocations” at the border. Azerbaijan can provoke border clashes and start a war at any moment, with the primary goal being to seize more territory from Armenia and once again convince the Azerbaijani public that “Armenian revanchism is awake, and it is necessary to remain united around the nation’s leader Ilham Aliyev”.

Azerbaijan’s modus operandi is to start claiming for an extended period that Armenian forces have violated the ceasefire, then attack Armenia and say it was “forced to prevent an Armenian attack”. 

The holding of the COP29 summit and the potential economic dividends proposed by the U.S. will not force Aliyev to abandon his aggressive tactics. Furthermore, the intense build-up of the Azerbaijani army, the increase in the military budget, the periodic military exercises, and the aggressive rhetoric may suggest that Aliyev plans new military aggression against Armenia in the spring of 2025 after the COP29 summit.

The aggression scenario becomes more likely considering Azerbaijan’s demand for Armenia to remove the European Union observer mission from its territory. The EU observers are unarmed and will not fight against Azerbaijan on Armenia's side. However, the observers monitor the Armenian-Azerbaijani border and can document any Azerbaijani military attack, reporting it to Brussels and Washington. If the observers record that Baku initiated the war, it could lead to sanctions by the West against Aliyev’s regime. By demanding that Armenia remove the observers, Azerbaijan is trying to safeguard itself from that scenario. 

There have been instances where EU observers refuted Azerbaijan’s accusations against Armenia of violating the ceasefire and dismissed Baku’s claims about troop deployments at the border. 

Aliyev is pursuing a long-term policy of exerting military-political pressure on Armenia, from which he will never back down. The signing of the treaty would tie his hands for carrying out new aggressions.

The falsity of the “Armenian revanchism” legend is also evidenced by the recent survey results published by the International Republican Institute. According to the survey, 56% of Armenian citizens said they support the policy of signing a peace treaty with Azerbaijan. Pashinyan cannot be preparing for a new war when Armenian public opinion supports the peace process. 

Even if the citizens of Armenia, under the threat of war from Aliyev, hold a referendum and amend the constitution, Baku will present new demands, which will be brought to the forefront to prevent the signing of the treaty.

Baku demands that Armenia punish “criminals who participated in the Karabakh wars”. Baku also makes demands to “ensure the return of Azerbaijanis to Western Azerbaijan [the current territory of Armenia].” Baku demands that restrictions be imposed on the Armenian armed forces and that the process of military build-up be stopped. Baku demands that Armenia remove EU observers from its territory. Baku demands that Armenia join it in appealing to the OSCE to dissolve the “Minsk Group” created for the Karabakh issue. 

The Biden administration has little time to bring Azerbaijan into a constructive process. The U.S. should present two dossiers to Aliyev's administration. The first dossier could outline the economic, political, and energy benefits Azerbaijan would gain by signing an agreement with Armenia. In the second dossier, the U.S. must clearly state the crushing sanctions Aliyev's dictatorial and corrupt administration would face if it continues to fail to sign the agreement. 

Aliyev’s authoritarian regime has a typical Putin-like nature—it only responds to force. Azerbaijan will not sign a peace agreement without being pressured. The promise of economic dividends won’t compel Aliyev to abandon his tactic of maintaining power through the fear of a "revanchist war" from Armenia. The U.S. must put Aliyev's administration at a crossroads: to choose the package implying a peace agreement or the second package, which implies sanctions for refusing to sign the agreement.

A realistic resolution of the intractable Armenian-Azerbaijani conflict can be expected after the results of the U.S. elections on November 5. Aliyev’s plans could be thwarted by Kamala Harris being elected president of the United States. She will likely not only remain deeply engaged in resolving issues in the South Caucasus but will also adopt a tougher policy toward Azerbaijan, including the possibility of imposing sanctions.

If Aliyev definitively refuses the path to peace, in addition to sanctions, the U.S. could ensure peace by supporting Armenia's military, political, and economic strengthening. If the West supports Armenia in restoring the military-political balance, Armenia will step out of the "attractive victim" status. In that case, there is a chance that Azerbaijan will realise that establishing peace with Armenia is cheaper and will finally abandon the use of force.