Amid continued arms race between Armenia and Azerbaijan, commander of N-K de facto defence ministry Movses Hakobian 15 Aug reported N-K’s small “military”, which is well integrated with Armenia’s military and dependant on Yerevan for support, engaged in its own arms buildup over past year. During mid Aug visit to N-K Armenian Defence Minister spoke of need to maintain “battle worthy army” in N-K. Russian President Medvedev and Azerbaijani President Aliyev met 9 Aug, discussed N-K. Baku 23 Aug lodged formal protest with France over 4 French MPs’ 22 Aug visit to N-K.

Expressions of deepening frustration and pessimism, particularly on Azerbaijani side, following failure of much-anticipated late June Kazan summit to produce significant progress on resolution of N-K conflict.

At 24-25 June Summit in Russian city Kazan, Azerbaijani and Armenian presidents failed to agree on “basic principles” for resolving N-K conflict, despite prior intense diplomatic activity by OSCE Minsk Group countries including statements by U.S., French, Russian presidents. Both sides blamed other for stalemate.

Nagorno-Karabakh (N-K) authorities 1 May reported 3 Armenian soldiers killed 29-30 April in skirmishes along main frontline. Armenian Foreign Ministry condemned deaths; Azerbaijan rejected accusations, mid-May accused Armenian forces of violating ceasefire in Goranboy, Fizuli, Agdam regions. Growing concern from international mediators over deadly exchanges of fire along line of contact in recent months. Planned reopening of civilian airport in N-K postponed.

3 Armenian servicemen killed, 2 wounded as result of intensified ceasefire violations 29 Apr. Armenian Defence Ministry 30 Apr said it will take “large-scale punitive” actions on line of contact against Azerbaijani “acts of sabotage”. Minsk Group co-chairs visited Yerevan, Nagorno-Karabakh (N-K) and Baku 11-14 Apr to discuss “next steps for reaching agreement on the Basic Principles”; 14 Apr said time had come for finalising and endorsing Principles, moving onto drafting of peace agreement. Co-chairs also presented to Armenian and Azerbaijani representatives draft mechanism for investigation of incidents along front lines. Armenian, Azerbaijani, Russian FMs held talks in Moscow 22 Apr. OSCE mediators 11 Apr released executive summary of report on Oct 2010 field assessment mission to N-K: estimate some 14,000, mostly Armenian refugees, live in occupied territories close to N-K; called on parties to avoid activities that would prejudice final settlement, change character of disputed areas.

Armenian, Azerbaijani, Russian presidents 5 March held talks in Sochi, Russia; agreed again to finalise exchange of prisoners, investigate recent skirmishes along ceasefire line under aegis of Minsk Group, “resolve all controversial questions in a peaceful manner”. As part of agreement Armenia and Azerbaijan 17 March exchanged prisoners. However situation on frontline remains deadly: Armenian soldiers killed on frontline 4, 17 March, reportedly from sniper fire. Azeri boy killed in frontline Agdam district 7 March, reportedly from Armenian sniper fire, , Azerbaijani servicemen killed by Armenian fire 21 and 23 Mar. Azerbaijan 15 March threatened to shoot down civilian planes flying to N-K if Karabakh govt proceeds with planned May reopening of civilian airport in region, closed since 1991.

Minsk Group co-chairs met with Azerbaijani President Aliyev and Defence Minister Abiyev 11 Feb; Abiyev stated Azerbaijan is making serious preparations for “liberation of the occupied territories”, but emphasized need to resolve conflict according to existing international norms. Azerbaijan 14 Feb launched unprecedented Command Post Exercises in region, involving regular army, all supplemental military and reserve agencies. Armenian armed forces also launched large-scale anti-sniper trainings, following Azerbaijan’s sniper attacks and acquisition of sniper guns and planned trainings with the assistance of foreign contractors. Azerbaijan reported 200 ceasefire violations 30 Jan - 5 Feb. Armenian opposition parties and head of delegation to Council of Europe Parliamentary Assembly criticised body’s late Jan decision to resume work of N-K subcommittee, suspended 2008.

Russian FM Lavrov 13 Jan said Minsk Group mediators trying to find mutually acceptable formulations on remaining “two or three” sticking points blocking agreement on basic principles; 24 Jan mediated meeting between Armenian, Azerbaijani FMs. Armenian president Sarkisian speaking in Cyprus 17 Jan said N-K “has no future within Azerbaijan”. 2 Armenian soldiers reported wounded, 1 killed, and 2 Azerbaijani soldiers reported killed as a result of continued ceasefire violations on line of contact. Sides accused each other of initiating incidents, Armenia claimed Azerbaijan deliberately breaking ceasefire to sabotage international efforts to resolve dispute, boost army morale.

At 1-2 Dec OSCE summit in Astana, presidents of Armenia, Azerbaijan exchanged accusations over stalemate in NK peace talks. Speaking at summit Armenian President Sarkisian threatened to recognize NK in case of Azerbaijani attack; reiterated statement 10 Dec at meeting of heads of state from Russian-led Collective Security Treaty Organization. Despite rhetoric, minor progress achieved after Armenia and Azerbaijan 1 Dec signed joint statement under OSCE Minsk Group mediation committing to more decisive efforts to resolve issue, saying peaceful, negotiated settlement only way to “real reconciliation.”

Further tensions between Armenia, Azerbaijan over NK marked by hostile rhetoric. After observing early month major military drills by NK Armenian forces close to line of contact with Azerbaijan, President Sarkisian 12 Nov stated if attacked Armenia and NK will deliver “final and deadly” blow to Azerbaijan and resolve issue “once and for all”. Followed renewed threats by Azerbaijani President Aliyev during 7 Nov visit to Azerbaijan-controlled frontline districts that military solution to NK, other occupied Azerbaijani territories possible “at any moment”. Armenia, Azerbaijan made several exchanges of prisoners, bodies of those killed in recent clashes following Oct swap agreement achieved with Russian mediation in Astrakhan.