Even as the negotiations between Armenia and Azerbaijan to resolve their three-decade-old conflict appear stuck, there are potential openings for more creative discussions on the stickiest issues dividing the two sides, a new report argues.

While there were some hopeful signs that the negotiations might have gained some new energy at the beginning of 2019, by now the relationship has again deteriorated. But all is not lost, the report, “Digging out of Deadlock in Nagorno-Karabakh” by the International Crisis Group (ICG), argues.

“A narrow opening to breathe life into the moribund peace process … risks closing,” the report says. “Yerevan and Baku would be wise to act fast.”

ICG focuses on three of the most critical and sensitive issues surrounding the conflict: how to deal with the territories surrounding Nagorno-Karabakh that Armenian forces occupy, a potential international peacekeeping or monitoring mission in the region, and the ultimate status of Karabakh itself.

While not much is known about the content of the last year’s negotiations between the leaders and foreign ministers of the two countries, they are unlikely to have dealt substantively with any of those questions. But the report identifies some potential deals that could be made, or at least discussed.

On the occupied territories, ICG proposes an agreement whereby the Armenian side would issue a moratorium on further settlement if Azerbaijan agreed to stop pursuing legal claims about the settlements in international courts.

As background, the report documents a steady increase in development of the occupied territories, in particular a growth in agriculture in spite of the lack of infrastructure there. “Nine years ago, when we first arrived, we worked on only 150 hectares of land,” one unnamed settler in the region of Kubatly told ICG. “Now there is not a piece of land to spare.”

The growth in agriculture has prompted officials in the de facto Karabakh government toward farther and farther frontiers of settlement.

“Parts of Jebrail and Fizuli districts, to the south and east of Nagorno-Karabakh, had been largely left settlement-free, possibly due in part to pressure from Yerevan, which sought to leave itself the option of a peace deal that would return those areas to Baku’s control,” the report says. “Increasing demand for land, however, has made de facto officials and the Nagorno-Karabakh population more determined to maintain control of those areas. Even those who once saw the territory as subject to a bargain now want to hold on to it.”

Settlements have barely been discussed in the negotiations. Azerbaijan worries that any deal could be construed as a de facto recognition of them, while Armenians are caught between nationalist forces who want to expand settlements and the recognition that a peace deal would likely involve their return to Azerbaijan. “For Armenian officials pessimistic that peace talks will get anywhere, avoiding any discussion of the settlements, and thus allowing their growth and postponing decisions on their fate, is preferable to trying to resolve the question now,” the report says.

On the peacekeeping question, neither side has eagerly sought a foreign force, even though one would likely be necessary in the case that a peace agreement were reached and the delicate status quo interrupted. Armenians fear a peacekeeping force would break their monopoly on control of Karabakh and the surrounding territories, the Azerbaijanis that it would cement in place the status quo. Both sides also distrust the intentions of Russia, the only state likely to be interested in providing a suitable force.

The ICG suggests some modest steps to start conversations on that issue: to revive the Vienna-based High Level Planning Group of the OSCE, which was tasked with coming up with peacekeeping options but which has stagnated in recent years; and to bolster the OSCE’s small on-the-ground monitoring mission.

The thorniest issue of all is the status of Nagorno-Karabakh, on which both sides have been taking increasingly uncompromising positions, each insisting that it must have sovereignty over the territory. But ICG identifies some room for optimism, such as Armenian Prime Minister Nikol Pashinyan’s new talking point that any solution to the conflict has to be acceptable to Azerbaijanis as well as to Armenians, and some behind-the-scenes discussions in Baku about the types of autonomy they would be willing to grant an Armenian-dominated Karabakh region, would it ever return to Azerbaijan’s fold.

ICG spoke to policymakers in Baku about what parameters Azerbaijan might be willing to offer, and found that they could “envision a future in which Nagorno-Karabakh authorities:

Can reject decrees or laws from Baku related to self-governance in the region;

Enjoy considerable self-governance, including in educational and cultural policy, public health, some branches of the economy, law enforcement and postal services, among others;

Are subject to Azerbaijan’s judicial and customs systems;

Can establish economic representation in foreign countries;

Have a role in formulating foreign and security policies (but no veto over Azerbaijan’s policies in those areas);

Maintain a demilitarised zone with no armed forces inside the region.”

Those are not likely to impress Armenians much. Nevertheless, “they can be seen as suggesting a desire to talk rather than fight,” ICG notes. “The fact that Baku is putting ideas forward could at least create space for discussions on governance and security in Nagorno-Karabakh.” The sensitivity of the topic, however, means that “even conversations on these matters would be a radical step and would likely need to take place initially through semi-formal or informal channels.”