Minsk Group U.S. co- chair Matthew Bryza visited Armenia, Nagorno-Karabakh and Azerbaijan 29 July-1 August. U.S., French and Russian co- chairs met in Paris 2 August; discussed “new proposals” to resolve current deadlock.

Principles of proposed peace settlement, developed during 2-year confidential negotiations, publicly released by OSCE Minsk group co-chairmen and endorsed by G8 Summit participants in St. Petersburg 17 July. Principles include redeployment of Armenian troops from Azerbaijani territories around NK, demilitarisation of those territories, return of refugees, and referendum on final status. OSCE special envoy Kasprzyk submitted report on contentious fires affecting areas close to line of contact, concluding international community should provide fire fighting equipment to address problem.

Second round of OSCE Minsk Group-mediated talks between Armenian and Azeri presidents in Bucharest failed to produce agreement on principles 4-5 June. Follow-up meeting between foreign ministers in Paris also failed. Minsk Group co-chairs said suspending intensive mediation efforts until sides demonstrate political will to overcome differences. Matthew Bryza replaced Steven Mann as American OSCE Minsk Group co-chair.

Azeri and Armenian FMs met with OSCE Minsk Group in Strasbourg 18 May, but failed to agree on proposed 4-6 June date for 2 presidents to meet in Bucharest. Minsk Group chairmen held talks with President Kocharian in Yerevan 25 May.

OSCE Minsk Group co-chairmen visited Yerevan and Baku in attempt to organise summer meeting between Armenian and Azerbaijani presidents. Armenian-backed forces in N-K held week-long military exercises, protested by Azerbaijan. 1 Azerbaijani soldier killed near line of contact 3 April.

Armenian and Azerbaijani presidents exchanged threats to resume hostilities, as shooting intensified across ceasefire line. 1 Armenian and 2 Azerbaijani soldiers reported dead 8 and 18 March. U.S., French and Russian Minsk Group co-chairs met in Istanbul 20 March to discuss further negotiations. Armenian and Azerbaijani delegations to Parliamentary Assembly of Council of Europe agreed to extend monitoring commission mandate.

Talks between Azerbaijani  President  Aliyev  and  Armenian  President Kocharian produced no tangible results, reportedly after failure to agree on linkage between referendum on status and withdrawal from occupied territory. Mediated by OSCE Minsk Group, talks sought to produce statement on general principles of settlement. Sides expressed readiness to continue negotiations and OSCE co-chairs set to meet in Washington early March. Russian President Putin during Baku visit said Russia willing to help broker negotiations.

Hopes raised of possible signing of “framework agreement” at 10-11 February Paris meeting between Azeri and Armenian Presidents Aliyev and Kocharian. OSCE High-Level Planning Group toured areas under NK occupation 21-28 January. OSCE chairman in office held NK talks in Armenia, Azerbaijan and Russia; said ready to aid potential peacekeeper deployment.

OSCE Minsk Group co-chairmen travelled to Armenia and Azerbaijan 15-17 December; expressed optimism for 2006 settlement breakthrough. OSCE High Level Planning Group visited region for first time in 8 years. EU foreign policy chief Javier Solana offered greater EU involvement in settlement efforts after meeting with Armenian and Azerbaijani FMs; sides welcomed offer but said should focus on post-conflict reconstruction. Georgi Petrosian, former NK hardline leader, appointed new de facto NK foreign minister.

OSCE Minsk Group co-chairs stated intention to relaunch talks with Azerbaijan and Armenia FMs at 5-6 December OSCE Ministerial Council meeting in Slovenia.