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A preliminary breakthrough in the two-decades-old Nagorno-Karabakh conflict – a framework agreement on basic principles – may be within reach.

Armenia and Azerbaijan have failed to resolve the Nagorno-Karabakh conflict, even though the framework for a fair settlement has been on the table since 2005. A comprehensive peace agreement before presidential elections in both countries in 2008 is now unlikely but the two sides still can and should agree before the polls to a document on basic principles, which if necessary clearly indicates the points that are still in dispute.

Settlement of the long running Nagorno-Karabakh conflict -- the most significant obstacle to stability in the South Caucasus -- remains elusive, despite more optimistic noises recently from Azerbaijan and Armenia. Eleven years after the 1994 ceasefire, burgeoning defence budgets, increasing ceasefire violations, and continuing demonisation by each side of the other side are ominous signs that time for a peace agreement is running out.

The conflict between Azerbaijan and Armenia over Nagorno-Karabakh is the most significant obstacle to peace and stability in the South Caucasus. Eleven years into a ceasefire, the parties have been unable to sign a single document bringing them closer to a settlement. Whatever is being done at the internationally mediated negotiations, at ground level resumed war appears a real possibility.