Armenia and Azeri presidents failed to meet at 2-4 Apr NATO Bucharest summit. Baku submitted formal query to OSCE secretariat on appointment process for Minsk Group co-chairs. Azeri FM Mammadyarov said 15 Apr new proposals expected from Group; declared willingness to meet with new Armenian FM Eduard Nalbandian 7 May in Strasbourg. Armenian President Sarkisian 16 Apr said “independence is irreversible”.

National Opposition Council 9 March launched mass rally, hunger strike, protesting electoral law reforms, urging release of Nov 2007 protesters. Parliament 12 March approved constitutional amendments to electoral system, cutting number of MPs; opposition denounced, claiming measures preserve government control of parliament but ended hunger strike 25 March. Former defence minister Okruashvili 28 March sentenced 11 years in absentia for extortion. Continued tensions with separatist regions: South Ossetia (SO), Abkhazia issued appeals for international recognition 6,7 March citing “Kosovo precedent”. Tblisi proposed new “2+2+2 formula” for SO negotiations with Tblisi administration in region, de facto authorities, Russia, OSCE and EU to replace Joint Control Commission. Explosions in SO: car bomb on prosecutor’s car 27 March in Tskhinvali killed 1; bomb on peacekeeping patrol in Znauri region 23 March. President Saakashvili 28 March offered new Abkhazia proposal, including free economic zone, VP-post, government representation, veto to Abkhaz-related decisions, security services merger; Abkhaz leader Baghapsh rejected. Tense Georgian-Russian relations: Duma 14 March urged recognition of breakaway regions. Saakashvili 18 March called for “total revision” of Abkhazia peacekeeping format including Russian force presence after Moscow 6 March withdrew from 1996 CIS treaty imposing sanctions on Abkhazia. President Putin warned Georgia over NATO bid after President Bush vowed support 19 March during Saakashvili U.S. visit.

Azeri President Aliyev announced “ready for war” 4 Feb during Slovenian PM Rupel visit to Baku. Armenia ruled out territorial exchange for peace deal. OSCE Chairman representative Kasprzyk 14 Feb warned both parties against increased ceasefire violations, announced intensification of monitoring; 1 Azeri soldier reportedly killed 16 Feb. Baku called for discussion of OSCE report on confl 15 Feb. Azeri foreign ministry protested against polling stations in region for 19 Feb Armenian presidential elections. Azeri Deputy FM Azimov said new negotiations with elected Armenian president needed “initiative from the OSCE Minsk Group”.

OSCE Minsk Group met with Azeri FM Mammadyarov and President Aliyev in Baku 14 Jan to begin negotiations based on Nov 2007 draft “basic principles”. Aliyev ruled out independence for contested region in New Year’s speech. De facto President Baho Sahiken called 16 Jan for inclusion of NK representatives in talks.

OSCE Minsk Group presented “basic principles” for Karabakh peace process to Armenian and Azerbaijani FMs 29 November. Armenia expressed confidence in reaching deal before February elections; Azerbaijan claimed principles failed to provide basis for dialogue. Armenia threatened to quit 1990 Conventional Forces in Europe (CFE) Treaty, accusing Azerbaijan of military build-up in violation of CFE limits, 14 December.

No visible moves over peace talks: meeting between Armenian and Azeri FMs in sidelines of 29-30 November Madrid OSCE ministerial meeting cancelled. Azerbaijani Defence Minister Abiyev told press chance of war “close to 100%” 27 November.

OSCE Minsk Group co-chairs conducted shuttle diplomacy between Baku and Yerevan 24-27 October, meeting with Armenian President Kocharian and Azerbaijani President Aliev: U.S. co-chair Matthew Bryza quoted in local media saying framework agreement might be reached by sides by spring of 2008.

OSCE Minsk Group co-chairs held separate talks with Azerbaijani FM Mammadyarov and Armenian FM Oskanian in Brussels 4 September; visited Yerevan, Baku and Stepanakert, meeting Presidents Kocharian and Aliyev and de facto NK authorities, 16-18 September. Presidents may meet 5 October on sidelines of CIS summit in Dushanbe. Bako Sahakian inaugurated new de facto NK president 7 September; parliament approved his appointment of Araik Harutyunian as new PM 14 September. Azerbaijani claims 3 Armenian, 2 Azeri soldiers killed in 2 shooting incidents in Fizuli and Agdam districts near NK 4 September denied by de facto NK authorities.

U.S. co-chair of OSCE Minsk Group, Matthew Bryza, visited Armenia 30 July, Azerbaijan 3 August; pushed for October/November meeting of presidents to agree basic resolution principles. Former Armenian FM Hovannisian submitted parliamentary bill 28 August calling for recognition of NK independence. Armenian soldier defected to Azerbaijani forces 4 August.

Bako Sahakian, former de facto security service head, supported by all major parties, won 85% of votes in 19 July de facto presidential election; main contender, former deputy FM Masis Maylian, got 12%. International community dismissed poll as illegitimate. Minsk Group Chairmen urged Armenian and Azerbaijani presidents to agree basic settlement principles before 2008 presidential elections in both countries.