German Foreign Minister Frank-Walter Steinmeier on Wednesday kicked off a three day trip to the volatile South Caucasus, where promoting reconciliation between Armenia and Azerbaijan over the contested Nagorno-Karabakh is on the top of the agenda.

Steinmeier heads to the region with Germany at the helm of the rotating presidency of the Organization for Security and Cooperation in Europe (OSCE), which supports reconciliation between Armenia and Azerbaijan through the Minsk Group co-chaired by France, Russia and the United States.

Germany's goal as head of the OSCE is to try to reinvigorate talks between Azerbaijan and Armenia after the frozen conflict in Nagorno-Karabakh escalated in April, leaving at least 120 dead on both sides of the contact line.

"The status quo in the long run is not sustainable," said Steinmeier in Armenia on Wednesday. "The longer concrete progress fails to materialize, the greater the risk of renewed escalation."

The goal is to consolidate the existing ceasefire, increase confidence building measures and the resumption of peace negotiations to resolve one of the world's most intractable conflicts.

The German foreign minister met with his Armenian counterpart Edward Edward Nalbandian and President Serzh Sargsyan in Yerevan, where he also visited the Armenian genocide memorial and met with civil society groups.

On Thursday in the the Azeri capital Baku, Steinmeier met with his counterpart Elmar Mammadyarov, who he urged to reach a compromise with Armenia.

"We need hope on all sides and the willingness to reach compromises," Steinmeier said, calling for peace talks to advance.

Armenia and Azerbaijan are scheduled to meet in Paris at an undetermined date. Armenian President Sargsyan and Azerbaijan President Ilham Aliyev last met on June 20 in Moscow, where Russian President Vladimir Putin helped mediate talks.

Steinmeier's three day visit to the region will wrap up with a trip to Tblisi, Georgia.

Difficult task

In the aftermath of the collapse of the Soviet Union, Azerbaijan and Armenia went to war with each other over Nagorno-Karabakh until the two sides reached a truce in 1994.

The post-1994 status left Nagorno-Karabakh, an ethnic Armenian territory, but officially a part of Azerbaijan, under the control of local Armenian forces and the Armenian military.

The conflict has left at least 30,000 people dead and displaced more than a million, mostly Azeris. The people of Karabakh and Armenia demand self-determination, and independence or unification with Armenia, while Azerbaijan wants the return of territories and the right of return for Azeris displaced from Nagorno-Karabakh and other areas under Armenian control.

The conflict has periodically violently reared its head, but an arms build-up in recent years has sparked concern a highly combustible region riven by ethnic hostilities and criss-crossed by oil and gas pipelines could flare out of control.

Long upset that one-seventh of its territory is under occupation, energy-rich Azerbaijan used high oil prices to go on a military spending spree, buying billions of dollars in weapons.

At times, Azerbaijan's defense budget has surpassed the entire government budget of Armenia, which has also built up its military. One difference between the conflict now and that of 1994 is that both sides have much more deadly and sophisticated weaponry.

Against the backdrop of hostilities between Azerbaijan and Armenia is an array of regional alliances drawing in Turkey and Russia.

Russia has good relations with both Azerbaijan and Armenia, providing weapons to both sides of the conflict, but is closer to Armenia, with which it has a collective defense treaty, and where it has a military base in Gyumri.

Turkey, which shares ethnic and linguistic ties to Azerbaijan, has vowed that it will stand by Baku until it reasserts sovereignty over all of its territory. Turkey closed the border with Armenia in the early 1990s over the conflict, giving Armenia land access to the outside world only through Georgia and Iran.

Armenia genocide resolution complicates German efforts

Complicating Germany's diplomatic efforts in the region is the Bundestag's passage of an Armenian genocide resolution earlier this month, a move that has increased tensions between Berlin and Ankara.

Indirectly, the resolution complicates Germany's diplomatic efforts to reinvigorate the peace process over Nagorno-Karabakh and a related conflict between Armenia and Turkey.

Even Steinmeier, who voiced support the Armenia genocide resolution but wasn't in the Bundestag to vote, warned that the resolution in the end would make reconciliation between Turkey and Armenia more difficult. "I think it unwise to jeopardize this highly sensitive process from the outside," Steinmeier warned in May.

Germany has called upon Turkey and Armenia to initiate talks over the history of events surrounding the fate of Armenians during World War One, as well as the resumption of diplomacy to normalize relations.

A previous effort between Turkey and Armenia to normalize relations led to the signing of a 2009 accord, but that ultimately collapsed after Ankara placed a condition of ratification and opening the border on a resolution of the Nagorno-Karabakh issue.