COULD Azerbaijan and Armenia be on the verge of renewed war over Nagorno-Karabakh, the Armenian-populated enclave inside Azerbaijan conquered and occupied by Armenia in 1994? On the face of it, no. On Saturday the presidents of the two countries met to discuss the issue in the southern Russian resort town of Sochi, with Russia's president, Dmitry Medvedev, acting as honest broker.

They made some pleasant noises. Both parties committed to resolve their differences peacefully, and to implement fully an agreement on the exchange of prisoners of war made in October. They also agreed to investigate ceasefire violations, under the aegis of the OSCE.



Such measures could restore some confidence. But they will do little more. Often described as “frozen”, the Nagorno-Karabakh conflict has been warming up. A recent report from the International Crisis Group says that ceasefire violations rose by 53% last year. At least 25 soldiers were killed in skirmishes. Hours before the Sochi talks began, reports emerged of the death of an Armenian soldier from Azerbaijani sniper bullets. In total, 3,000 people have been killed in skirmishes along the boundary line since the May 1994 ceasefire took effect.

Both countries have stepped up their bellicose rhetoric. Ilham Aliev, Azerbaijan's president, warned of war in at least nine separate speeches in 2010, and has shown no sign of letting up this year. His Armenian counterpart, Serzh Sargysan, has strongly underlined his country's readiness to repel any attacks. Recent military exercises in both countries suggest this is not empty bravado.

Moreover, both leaders are putting their money where their mouth is. In oil-wealthy Azerbaijan, defence spending has grown by an average of 50% every year since 2003. This year defence will account for one fifth of Azerbaijan's total public spending, and more than the entire Armenian budget. But Armenia too has increased its weaponry, with help from its Russian friends.

Popular attitudes in each country are unforgiving, with commemoration of past injustices at this time of year reinforcing hard-line attitudes. Azerbaijanis recently marked the 19th anniversary of the Khojali massacre, while Armenians mourned the 23rd anniversary of the anti-Armenian pogroms in Sumgait.

Neither leader appears minded to make concessions. Yet the status quo is unacceptable, particularly to Azerbaijan, which hosts over 580,000 displaced people and smarts at the occupation of 16% of its territory.

How much does it matter? As Thomas de Waal, a well-known commentator (and former contributor to The Economist) notes, Nagorno-Karabakh is hardly a foreign-policy priority for outsiders. But as the 2008 war between Russia and Georgia over South Ossetia demonstrated, frozen conflicts can turn hot very quickly.

Beyond the human suffering that renewed conflict would entail, Azerbaijan is both a major supplier of, and transit route for, oil and gas. The south Caucasus is also a major supply route for western countries' efforts in Afghanistan. Outside powers have many reasons to pay close attention.

The chances of pre-meditated war, the ICG argues, are slim. Both sides appear to believe that grandstanding is a useful negotiating tactic. The danger is that it increases the chances of front-line skirmishes provoking an accidental war.

At least key mediators are saying the right things. Matt Bryza, the American ambassador to Azerbaijan, recently said that resolving the conflict “is more important than any other issue in the region”. Last Thursday a Russian government spokesman said his country would be putting in “all its efforts”. But the fact that negotiations are still to progress beyond basic confidence-building measures shows how far there is to go.