For four days in April, the former Soviet Union's oldest frozen conflict erupted. For the first time since a Moscow-brokered 1994 cease-fire, Armenia and Azerbaijan used heavy weapons in the contested region of Nagorno-Karabakh. It ended with Baku taking control of several strategic hills in the region, and left 200 soldiers dead. A full-on war was averted, but the violence was the worst uptick in fighting in 20 years. The conflict over Nagorno-Karabakh is a throwback to the death-throes of the Soviet Union. In the late 1980s, both Armenia and Azerbaijan spun loose from Moscow's yoke. Amid the chaos of the Soviet collapse, the ethnically Armenian Karabakh region attempted to break from Azerbaijani control. The ensuing war cost 30,000 lives. Russia secured a truce, but failed to secure the peace.

Today, Nagorno-Karabakh exists as a de-facto independent state within Azerbaijan. Both sides have invested considerable domestic political capital in gaining full control over Karabakh. While low-intensity skirmishing has characterized the stand-off for years, the April outbreak was a clear indication that the unresolved tension is boiling over. Eventually, something will have to give.

“The biggest problems are the fundamental disagreements over principles,” says Joshua Kucera, the Caucasus editor at Eurasianet. “For Azerbaijan, that is territorial integrity. For Armenia, it is the self-determination of the local people. This is what they argue about over and over again. Compounding that, both countries have really hardened their stance toward the other after 20 years of conflict.”

Going through the diplomatic motions, the Kremlin stepped in to broker a new round of talks between Armenia and Azerbaijan in June. Mediators from the U.S. and France who — via the Organization for Security Cooperation in Europe (OSCE) — were involved in the original Nagorno-Karabakh cease-fire have complemented Moscow's efforts. But there has been little progress.

Instead, both sides have been digging in. Public opinion in both Azerbaijan and Armenia, stoked by their own governments, has radicalized on the issue of Karabakh. Neither side, it seems, has much room for compromise. Meanwhile, Russia is selling arms to both sides. And just last week, Moscow created a joint military command with Armenia - an indication that things may get much worse.



Arms Race The diplomatic standstill is nothing new to the Karabakh conflict. And in the absence of asettlement, both sides have been locked in a deepening arms race. According to the Stockholm International Peace Research Institute, oil-rich Azerbaijan has spent some $22.7 billion on military hardware over the past decade. Russia is the main supplier. But it is also buying Israeli kamikaze drones.

Azerbaijan's Defense Ministry in September announced it would begin localized production of the explosive-tipped drones. The unmanned aircraft will be produced in the hundreds, and available for use in the near, but undetermined future, according to a statement on the ministry's website. Across the spectrum of weapons, Azerbaijan has been outspending Armenia's entire state budget.

Moscow, an ally of Armenia in the Collective Security Treaty Organization (CSTO) – a sort of post-Soviet analog to NATO – has been selling weapons to Yerevan at the same time, albeit at a discount price. The idea, Prime Minister Dmitry Medvedev explained in April, is to keep the peace by maintaining parity between the two sides as a form of deterrence. But it is not a convincing one.

“The outlook for the Karabakh conflict remains bleak,” says Richard Giragosian, the head of the Regional Studies Center, an independent think tank in Yerevan. “This Russian policy of balancing both sides with Russian weapons, [and] the absence of any real deterrence means there is nothing and no one preventing Azerbaijan from launching an offensive [as they did in April].”

The fruits of Russia's policy appeared in Yerevan on Sept. 21. During a parade celebrating Armenia's 25th anniversary as an independent state, the Armenian military paraded brand-new, Russian-built Iskander missile systems through the streets. Iskanders are serious hardware, capable of dealing significant damage to Azerbaijani infrastructure as far away as Baku.

“It is no secret that Azerbaijan has regularly purchased state-of-the-art weaponry in the past few years,” Armenian President Serzh Sargsyan told Russia's RIA Novosti news agency on Nov. 17. “We don't have the financial resources that Azerbaijan does, but we are constantly trying to balance the situation by finding an antidote. I think Iskander missiles are the antidote in this case.”

