Armenia and Azerbaijan: The Hard Road to a Lasting Peace

What’s new? Armenia and Azerbaijan have completed the text of a peace agreement, but Baku says it will not sign until Armenia removes claims to Azerbaijani territory from its constitution. Yerevan is drafting a new charter, but Armenian voters could reject it in a referendum, which might scuttle the deal.

Why does it matter? Armenia-Azerbaijan peace could bring momentous change to the South Caucasus. It could open long-closed borders and help make the region a hub for transit between Europe and Asia, promoting the area’s integration into the global economy.

What should be done?  Armenia and Azerbaijan should find a compromise on the constitutional question, sign the agreement they have reached and begin to reap the benefits of peace. Foreign partners should provide incentives for signing the agreement, particularly investment in the transport infrastructure that will be needed once borders reopen.

On 8 August, the leaders of Armenia and Azerbaijan met at the White House to initial a peace agreement (the text of which they had completed in March) that would normalise their relationship after more than three decades of gruelling conflict. But despite that symbolic breakthrough, the agreement remains unsigned and in limbo. The principal stumbling block is Azerbaijan’s insistence that it cannot sign a deal until the Armenian constitution is revised. Baku calls for removal of a reference to a 1990 document that sets a goal of Armenia’s eventual “unification” with Nagorno-Karabakh, what was then a majority ethnic Armenian-populated territory inside Soviet Azerbaijan. Baku argues that this constitutional clause amounts to a claim on Azerbaijani territory. Yerevan plans to hold a referendum on a new charter that would not feature the disputed wording, but resentment of Azerbaijani pressure heightens the risk that Armenian voters could reject the reform. The two sides should work out a compromise that does not make signing the deal contingent on Armenia’s constitutional referendum.

At the White House ceremony, the optics were positive, with smiles and handshakes. Back in the Caucasus, however, trust between the two states remains low, with each continuing to fear that the other has designs on its territory. In Armenia, many citizens have long believed that Baku intends to attack their country in the near term. Those concerns have been fanned by years of bellicose rhetoric from Baku, which did not abate even after Azerbaijan regained control of all its territory in and around Nagorno-Karabakh in a 2023 offensive that resulted in the exodus of the entire ethnic Armenian population of over 100,000. Azerbaijanis’ anxieties, by contrast, are about the future: they worry that Armenia will at some point regain the military advantage, use it to retake Karabakh and re-establish the area as an Armenian enclave. It remains to be seen how much the agreement in the White House will allay those fears.

While a deal to settle the Armenia-Azerbaijan conflict would not guarantee lasting peace, it would allow Armenians and Azerbaijanis to begin reaping the benefits that peace promises. The window will not be open forever: Baku and Yerevan should look for a compromise to avoid a situation where a peace deal is possible only after a constitutional referendum that could spoil the progress made to date. Finding middle ground could mean signing an agreement but delaying ratification until Armenia changes the constitution or its parliament takes other action to remove territorial claims from Armenian law. It would be in Azerbaijan’s interest to agree to such a compromise, given the unpredictability of a referendum and the chance that too much pressure would strengthen rather than sideline Armenian nationalists. The two countries’ foreign partners should foster an environment conducive to peace, by proposing investments and other form of cooperation that would help realise the vision of connectivity and global integration that the two countries share. 

On 13 March, after over a year of purely bilateral negotiations, Armenia and Azerbaijan announced they had ironed out their remaining differences and arrived at a final text for a peace agreement. Given that diplomacy aimed at resolving the conflict between the two had failed repeatedly before, the accord represented a huge feat – especially since the negotiations had no outside mediation.[1] In July, the leaders of the two countries met in Abu Dhabi, capital of the United Arab Emirates, the first time they had spoken other than on the sidelines of an event unrelated to the peace negotiations. A month later, U.S. President Donald Trump invited the two to the White House. The three men shook hands and, in addition to initialling the peace accord, agreed on a rough framework for re-establishing a transport link connecting Azerbaijan with its exclave of Nakhchivan via Armenia. The Armenian and Azerbajiani leaders also pledged to renounce further conflict and “clos[e] the chapter of enmity between our two nations”.[2] 

With trust between the two states still in short supply, the progress made to reach this point has been remarkable. But major obstacles remain in the path of ratification of the deal and an end to a conflict that has pitted the two neighbours against each other for over three decades and recurrent fighting.

The first war between Armenians and Azerbaijanis, in the 1990s, ended with Armenian forces winning control of Nagorno-Karabakh, a majority ethnic Armenian-populated territory inside Azerbaijan, as well as seven adjacent Azerbaijani provinces. The entire ethnic Azerbaijani population – which numbered more than 600,000 people – had to flee those territories.[3] Over the decades that followed, the United States, France and Russia – co-chairs of the Minsk Group, which the Organisation for Security Cooperation in Europe (OSCE) set up to broker negotiations after that war – failed to help the two sides reach peace. In 2020, Azerbaijan, which had been able to convert its considerable hydrocarbon wealth and close ties to Türkiye and Israel into billions of dollars of high-tech weaponry, instead went to war to take back its lost territories by force. It regained about three quarters of the land it had lost in the 1990s, but, after Moscow brokered a ceasefire, an ethnic Armenian-populated core of Nagorno-Karabakh remained under de facto Armenian control.

Yerevan and Baku then started talks on a new agreement in 2021.[4] But Azerbaijan, which retained the military upper hand, quickly grew dissatisfied with the progress of negotiations. Russia, Armenia’s traditional security guarantor, had fewer resources for the Caucasus after its full-scale invasion of Ukraine in February 2022.[5] With Moscow distracted, Azerbaijan launched another one-day offensive in 2023, which resulted in the complete capitulation of Nagorno-Karabakh’s Armenian de facto authorities. Virtually the entire ethnic Armenian population – which before 2020 had numbered about 150,000 – was displaced.[6]

After its resounding victory, Baku believes it can dictate terms to Armenia: while Azerbaijani officials seem interested in clinching a peace agreement, they have evinced little interest in compromise.[1] In a television interview in January, Azerbaijani President Ilham Aliyev said he was in no rush to secure a deal. “If Armenia does not need a peace treaty, we do not need one, either”, he said. “We can live and conduct our own policy without signing it”.[2] From its position of strength, Azerbaijan has continued to make demands of Armenia, both in and out of the immediate context of peace negotiations. 

While this hard bargaining has engendered resentment in Armenia, policymakers in Yerevan recognise that they are in no position to resist Baku’s demands. They want a formal peace, not just to bring an end to the cycle of violence, but also because they believe an accord would make it more difficult for outside powers (above all, Russia) to meddle in their neighbourhood. It also would help remove an external threat that has for decades encouraged militarisation and authoritarianism. For Armenia, peace with Baku also enables normalisation of ties with Türkiye and a reopening of the Armenian-Turkish border, which has been sealed since 1993 despite repeated efforts by successive Armenian governments to re-establish relations with Ankara.[3] An open border with Türkiye is crucial for Armenia’s connection to the rest of the world and thus its economic prospects.

As a result, Armenia has acceded to all of Baku’s demands except one. It has agreed to the dissolution of the Minsk Group, made unilateral concessions on border delimitation and in effect given up on the return of refugees to Karabakh.[4] The sticking point, however, has been Azerbaijan’s demand that Armenia change its constitution to remove a reference to a territorial claim to Nagorno-Karabakh. Yerevan has given signals, albeit ambiguous ones, that it is willing to fulfil that condition, too, though it would not do so until 2026, when a referendum on a new constitution is tentatively planned, at the earliest. Adopting a new national charter is one concession that Armenian Prime Minister Nikol Pashinyan cannot make by himself: Armenian voters must approve it. A plebiscite, moreover, is unlikely to be straightforward. The government will be asking voters to, in effect, ratify their own defeat at a time when the trauma from losses in 2020 and 2023 is still fresh. Compounding voters’ frustration is a sense that Azerbaijan keeps taking from Armenia at the negotiating table but gives little in return. 

One way Pashinyan is trying to lay the groundwork for a lasting peace is by promoting a rethink of the country’s conception of itself. Over the past two years, through speeches, social media campaigns and changes of national symbols, he has attempted to construct a new national narrative, the story of what he calls “real Armenia” in contrast with what he rejects as the antiquated “historical Armenia”.[5] The idea is to look forward, not backward, and to celebrate Armenia as it is today, within its current borders. That means, for example, no longer regarding Mount Ararat – which lies just over the border in Türkiye – as lost Armenian territory. It also entails giving up designs on regaining Karabakh. This effort serves domestic political purposes: the ideological precepts of past governments (and the current opposition) were indeed rooted in the notion of “historical Armenia”, while the leaders were themselves from Karabakh. It also helps sideline organised diaspora groups that have been critical of Pashinyan’s attempts to compromise.

Another factor clouding the peace agreement’s prospects has been fears of renewed fighting. Just three days before the announcement that the text of the agreement was settled, a news website associated with Azerbaijan’s defence ministry published a report claiming that Armenia planned to start a new war in April.[6] In the weeks that followed, after what had been a period of quiet along the border, the Azerbaijani defence ministry repeatedly alleged that Armenian forces were violating the ceasefire. Armenia denied the accusations – and its defence ministry presented photographic evidence that it was Azerbaijan that was repeatedly breaching the truce.[7] Many policymakers, analysts and ordinary citizens in Armenia interpreted the allegations from Baku as part of an information campaign intended to manufacture a pretext for an Azerbaijani attack on their country.[8]

Many in Armenia continue to worry that Azerbaijan will use its dominant position to take Armenian territory by force. Indeed, Aliyev has in recent years argued that Armenia represents historical “Western Azerbaijan” and insisted that Azerbaijanis be able to return to their former homes there. (Armenians who had been living in Soviet Azerbaijan and Azerbaijanis who had been living in Soviet Armenia nearly all fled during the first war between the two sides.) That demand has fuelled trepidation that Aliyev may have expansionary designs on the territory. Since a short offensive in 2022, Azerbaijan has controlled two small, strategic slices of Armenian territory in the south of the country, from which Armenia fears Azerbaijan could launch an offensive. Reflecting its concerns about a potential invasion, Armenia has been building defensive fortifications in the border areas where it says Azerbaijan has violated the ceasefire.[9]

The focus of Armenian fears has been a demand for what Azerbaijan calls the “Zangezur corridor”.[10] The ceasefire agreement that ended the 2020 war stipulated that Armenia allow creation of an “unimpeded” route connecting Azerbaijan with its exclave of Nakhchivan, which lies along the Iranian border, with a swathe of Armenian territory separating it from the Azerbaijani mainland. Aliyev soon began to refer to the route as a “corridor”, which many Armenians interpreted as meaning that Yerevan should exert no authority over it. Yerevan was rattled when Aliyev in 2021 made what appeared to be veiled threats to conquer land for the corridor if Armenia did not agree to Baku’s demands.[11]

Both countries are also building up their militaries. Since 2020, they have more than doubled their defence budgets. Armenia used to get nearly all its weaponry from Russia, which remains its formal ally through the Collective Security Treaty Organisation (CSTO) and via a bilateral mutual defence agreement.[12] Now, however, Yerevan is buying French and Indian weapons and seeking other partners. Azerbaijani official discourse plays up these arms purchases to claim that Baku is facing an imminent Armenian threat. That is a mischaracterisation of Armenia’s military capacity, however, which was severely diminished between 2020 and 2023. Azerbaijan, furthermore, is spending far more on weapons than is Armenia – acquiring substantial stocks from Israel and Türkiye, as well as additional materiel from Pakistan, Serbia and Slovakia.[13]

After a tense spring, the allegations of ceasefire violations have abated, however, and the accelerating diplomacy over the summer has decreased the risk of a new conflagration. Notwithstanding the progress on the bilateral track, both Armenia and Azerbaijan were eager for the new Trump administration to take office, seeing an opportunity to court Washington as much as to cement peace. According to multiple sources, the UAE repeatedly engaged the U.S. on Armenia-Azerbaijan negotiations so as to get the topic onto the administration’s agenda. U.S. diplomacy began in earnest in March, with a visit (reportedly also brokered in part by Israel, a close partner of Azerbaijan) by presidential envoy Steve Witkoff to Baku.[1] Progress was uneven: in mid-July, an Armenian official said the U.S. might be making different proposals to Yerevan and Baku.[2] But the White House meeting then came together quickly. Baku appears to have calculated that international shifts – a weakened Iran and a Russia in conflict with both the Armenian and Azerbaijani governments – made the time right to seek closer ties with the U.S.[3]

The two leaders’ smiles and handshakes at the White House, and their signatures on a pledge endorsing a renunciation of violence, respect for borders and closing the “chapter of enmity” between their two countries, will all lower the temperature and build trust. The framework for a transport arrangement – now known as the “Trump route” – is vague, but it seems to preclude the worst-case scenario that many Armenians imagined about the “Zangezur corridor”. The White House’s surprise intervention in the negotiations also has raised hopes on both sides that Washington is looking out for their interests, which should ease tensions. But the calm remains tenuous, and a failure to follow through on the diplomatic progress could easily result in a return to sabre-rattling.

The agreement, called the Agreement on Establishment of Peace and Inter-State Relations, would transform relations between Armenia and Azerbaijan if it is implemented.[1] It would re-establish diplomatic ties between the two states for the first time in more than 100 years.[2] The two parties would agree to recognise each other’s territorial integrity, make no territorial claims against the other and undertake not to raise such claims in the future. They would vow to refrain from the use of force and to “combat intolerance, racial hatred and discrimination, separatism, violent extremism and terrorism” within their respective countries. They would cooperate in the search for missing persons, including those forcibly “disappeared” during the conflict. All of the above was agreed upon in 2024. 

The sticking points were two articles that were finished only the following March. The first concerns the presence of third-party forces on the border: Azerbaijan wants the European Union monitoring mission that has been stationed in Armenia since 2022 to move away from the line.[3] The agreement stipulates that the parties “shall not deploy along their mutual border forces of any third party”. The second pertains to legal claims in international courts related to the conflict, with both agreeing to withdraw any such claims against the other and not to support others in the future.

As such, the accord leaves a number of critical issues unaddressed. The sides agreed in 2024 to remove from the text one of the most contentious clauses: that providing for a new transport route, initially contemplated by the ceasefire that ended the 2020 war, that would allow Azerbaijan “unimpeded” access through Armenian territory to Nakhchivan. While the transport issue is now formally delinked from the peace agreement, the two sides have continued to negotiate over it. At the August White House meeting, Aliyev, Pashinyan and Trump agreed on a framework for the transit arrangement, which envisages U.S. participation in establishing the route through Armenia. But the key issues in dispute – including how and by whom customs checks would be conducted, how security would be provided and what reciprocal consideration Armenia might get in Azerbaijani territory – are still not settled. 

Nor does the deal address the fate of the more than 150,000 ethnic Armenians who used to live in Karabakh (fewer than twenty remain after Azerbaijan’s repeated offensives). While groups representing refugees continue to seek return to their homes, Armenia’s leadership has dropped the matter from the negotiation agenda. While Yerevan advocating for a right to return would likely cause Baku to scuttle the talks, the issue now seems fated to remain an “open wound” in Armenian society, a European diplomat said.[1] That said, although advocates for the refugees have criticised the agreement – one told Crisis Group they would seek to act as spoilers of the deal – they appear to carry little weight among a populace weary of war.[2]

Baku and Yerevan are also addressing points of contention that are not part of the agreement. The two sides, for example, have been holding regular commission meetings since 2022 to define their shared border. Though a mere 12km of border have been demarcated to date, officials and experts in both countries say the process is making real progress. Armenia and Azerbaijan agreed to organise the delimitation effort geographically: starting from the northern tip of the border and moving southward. According to an Armenian official, that means “now we won’t be constantly bickering over which areas to work on”.[3]

When the parties agreed upon the text of the agreement, Azerbaijan said it expected Armenia to fulfil two additional conditions before it would sign. One was minor: Baku wanted the two countries to file a joint appeal to the OSCE to dissolve the Minsk Group. Azerbaijan objects to the fact that the Minsk Group’s mandate (dating from 1995) is the conflict over “Nagorno-Karabakh”, a term that to Baku represents the era of Armenian occupation.[1] That condition was met in the August agreement at the White House, as the two signed a letter asking the OSCE to close down the Minsk Group. The second condition – Azerbaijan’s demand that Armenia change its constitution – presents far greater problems. 

The preamble of the current Armenian constitution makes reference to a 1990 declaration of independence, issued when Armenia was still part of the Soviet Union, that calls for “reunification” of Armenia with what was then called the Nagorno-Karabakh Autonomous Oblast, part of Soviet Azerbaijan.[1] For Baku, this language represents a claim to its territory that has been enshrined in Armenian law. The constitution thus “clearly poses a territorial threat to Azerbaijan”, Aliyev has said. “So, [as long as] this paragraph is there, a peace agreement is not possible”.[2] He reiterated the demand to remove it immediately following the White House ceremony.[3]

Pashinyan has long spoken about wanting to change his country’s constitution, since even before the 2020 war.[4] His initial motivations appeared to be related to domestic governance, as well as his battles with the country’s constitutional court and the leadership he ousted by coming to power in 2018.[5] Still, real progress toward adopting a new charter has been fitful, with constitutional councils and commissions repeatedly being formed only to be abandoned.[6]

More recently, parts of Pashinyan’s rhetoric about the need for a new constitution have dovetailed with Azerbaijan’s demands. In early 2024, he called for a completely new constitution that would be “more viable in the new geopolitical and regional conditions”.[7] In other comments, he tied the issue directly to Armenia’s disputes with Azerbaijan and Türkiye.[8] In April, he said he thought the constitution should not refer to the declaration of independence.[9] At the same time, Pashinyan and other officials disavow any connection between Azerbaijan’s demands and their efforts to change the constitution, arguing that they are undertaking the exercise because the old document does not match their vision for a new Armenia.[10]

Though the Armenian authorities say they are ready to change the constitution on their own terms, they have pushed back against Azerbaijan’s public demands. The arguments made by Armenian officials have taken various forms. In the first place, they have asserted that the constitution as it stands does not represent an impediment to peace. The new peace agreement, they stress, stipulates that (once signed) it will supersede any domestic law, which according to Yerevan makes any apparent territorial claim in the constitution irrelevant. The Armenian government has also pointed to a constitutional court ruling from September 2024, which held that appointing the border commission did not violate the preamble’s language or the constitution in general.[1] Pashinyan and other officials say Baku’s fears about the constitution are therefore groundless. 

Azerbaijan is unpersuaded, however. Several officials and analysts in Baku argue that the constitutional court ruling was in fact a Trojan horse intended to make it more difficult to remove the territorial claims from the constitution. They note wording in the decision to the effect that parts of the constitution, including the preamble, are “immutable” and so can be removed only with an entirely new charter.[2] A senior Azerbaijani official expressed suspicion that Pashinyan planned it this way: “I don’t think this was done without a clear instruction from the government”.[3]

Baku’s uncompromising position can also be traced to a widespread feeling among policymakers and ordinary Azerbaijanis that Western nations did not adequately acknowledge how their people and country suffered from the war in the 1990s.[4] This resentment has been exacerbated by the sense that the U.S. and European powers jumped in to provide Yerevan with security assistance and other support when Armenia became vulnerable after 2020, something they did not do for Azerbaijan when its territory was attacked and its people forcibly displaced three decades earlier.[5] Meanwhile, they point to the reality that irredentist sentiment – the hope that Armenia will again control Karabakh at some point in the future – remains strong among Armenian political forces. 

Besides questioning the need to change the constitution, Armenian officials say Azerbaijan’s demand is a malicious ploy, which has no aim other than to sabotage the peace process.[6] Some analysts argue that Baku is being disingenuous in insisting on this condition, considering that a new Armenian constitution would offer no guarantee of long-term security for Azerbaijan since it would not preclude a future, irredentist Armenian government from altering the document again or from undertaking an attack regardless of what the new constitution says.[7]

Armenian commentators (and occasionally officials, though more often privately) also frequently complain that this demand from Baku is “new”.[8] It is true that Aliyev only publicly called for changing Armenia’s constitution in early 2024, when talks had already been going on for more than a year.[9] But Azerbaijani officials say they raised the issue privately with Armenian negotiators “from the beginning”. They add that under a “gentlemen’s agreement” between the two sides Armenia pledged to remove the language in question. It was only when Armenia stalled, they say, that Baku became more insistent and went public.[10] A foreign diplomat close to the negotiations confirmed that the issue was discussed early in the proceedings. “Azerbaijan was very up front about the constitution”, the diplomat said.[11]

Lastly, many Armenian officials and commentators contend that Azerbaijan’s own constitution includes what might be considered a claim on Armenia’s territory. They point to the document’s reference to Azerbaijan’s own declaration of independence, which holds the current state to be the successor state to the pre-Soviet Azerbaijan Democratic Republic, which claimed territories that include today’s Armenia. Armenian officials see this language as a more explicit claim to territory than anything in their own constitution, but “we don’t bring it up on purpose because it will complicate the process”, one said.[12] Other observers, though, argue that the claim in Azerbaijan’s constitution is much more indirect than that in Armenia’s, concluding that there is something to Azerbaijan’s grievances.[13]

The process of drafting a new Armenian constitution has been opaque but apparently chaotic. Observers note the absence of public input compared to previous attempts at constitutional change.[1] The justice minister has made optimistic promises about the process moving more quickly than originally anticipated; she said in May that it would be ready in ten months.[2] But the same month the minister made her comments, members of the Constitutional Reform Council, formed in 2021 to oversee the drafting of a new charter, told Crisis Group that they had seen no progress. One complained that the body had not met in more than a year. “Nothing is happening. They’re just lying”, this person said. Another member said the minister was providing an unrealistic timeline so as to pretend that constitutional reform is proceeding. Both said they expected officials at the justice ministry, not the council, to draft the new constitution.[3]

Whoever authors it, Armenian officials have said they plan to have a final draft text before the next parliamentary elections, currently scheduled for June 2026.[4] Pashinyan has said he wants the draft then to go to a referendum. The date for the vote has not been announced, however, and an analyst close to the government predicted it would not take place until 2027.[5] (A constitutional referendum cannot take place on the same day as a general election.[6])

Whenever it is held, the referendum represents a major gamble. Though officials insist that constitutional reform is their own initiative, born of the need to modernise the country’s governance, analysts in Armenia say voters widely believe the process is in truth driven by Aliyev’s bullying. Pashinyan appears to hope he can rally support for the new constitution. But his political capital may be depreciating: his Civil Contract party lost in local elections in April, which many interpreted as a warning to the prime minister ahead of the national polls. If Pashinyan remains the single most popular politician in Armenia, that is mainly due to the lack of appealing alternatives. So, while many in Yerevan expect him to prevail in 2026, Pashinyan’s coattails may not be long enough to win a constitutional referendum.

Getting the new constitution approved at the ballot box is no easy feat. It requires not just a majority of voters casting ballots in favour, but also that the majority amount to at least 25 per cent of all registered voters. Especially if the referendum is held on a day other than a general election, local analysts expect the government to have difficulty attracting enough people to the polls for a reform that even supporters will vote for only grudgingly. “It will never pass. It’s impossible”, a member of the Constitutional Reform Council said, expressing a belief widely held in Armenia. The consequences of the constitution being rejected would be unpredictable, but a “no” vote could give Baku an opening to declare that the Armenian people had rejected peace. “‘So, then the conflict will continue’”, this person imagined Aliyev saying. “‘And then we will crush you’”.[1]

To avoid this outcome, a number of Armenian observers have speculated that the government could try to remove the controversial language from the constitution without a referendum. It could do so either by amending the existing constitution to remove the reference to the declaration of independence or by revoking the 1989 declaration of “reunification” with Karabakh to which the declaration refers.[2] Either of these steps may be possible through parliamentary motions alone, given that Pashinyan’s Civil Contract party enjoys a supermajority in the legislature and can unilaterally pass constitutional changes. 

Yet doubts remain as to whether such a procedure would either be legal or serve Pashinyan’s political aims. In its September 2024 decision, the constitutional court reiterated that the preamble of the constitution is “immutable”, meaning it cannot be amended – though it can be scrapped if an entirely new constitution is adopted. Changing the constitution without a referendum might also call into question the new charter’s legitimacy, especially with such a consequential issue at stake. Pashinyan himself has said he wants a referendum so as to ensure that the public consents to altering the constitution.[3]

In its negotiations with Armenia, Azerbaijan appears to be driven by two opposing sets of motivations. One strand of thinking in the leadership favours the status quo. With Azerbaijan in the dominant position, many in Baku now see a peace agreement as benefiting Armenia more than their own country. They also believe more pressure on Pashinyan is needed to get the guarantees they feel they need for Azerbaijan’s long-term security – and to keep getting concessions from Yerevan. At the same time, the leadership has strong reasons to embrace peace. Azerbaijan has developed an ambitious plan to become a regional hub of transport and trade, part of its goal of diversifying the economy as the country’s oil and gas reserves are depleted. Policymakers recognise that an unresolved conflict with a neighbour and closed borders prevent them from fully realising that vision.[1]

Policymakers in Baku say they want peace, but also argue that they can survive without it. After all, Azerbaijan has already achieved what had for decades been its paramount strategic goal: regaining control of all its territory. Making peace also carries the risk for Azerbaijan’s leadership of losing a galvanising cause that has undergirded the government’s legitimacy for three decades: the need to sublimate all other social and political demands to the struggle with Armenia. A stasis in which the rivalry with Armenia is kept alive, with occasional spikes of tension, may best serve the government’s domestic interests. While the mood now favours a conciliatory attitude toward Armenia, future developments – either foreign or domestic – could change that calculation.

Azerbaijan is also now in a strong strategic position, buoyed by a host of concurrent geopolitical shifts. Russia’s full-scale invasion of Ukraine in 2022 forced Moscow’s attention away from the Caucasus, to Baku’s benefit. Azerbaijan gained a freer hand militarily in Karabakh as the Russian peacekeepers who had been stationed there largely stood aside while Azerbaijan made repeated advances – declining to react even when Russian troops were killed by Baku’s forces.[1] In addition, the war in Ukraine has increased the importance to European countries of good relations with Azerbaijan, as the EU and member states made deals to substitute Azerbaijani gas for Russian energy sources.[2] The attractions of Azerbaijan as a route for transit between Europe and Asia – what has become known as the Middle Corridor – also gave the country a newfound cachet among Western states as war and sanctions enveloped Russia.[3] (Any land route that bypasses both Russia and Iran must go through Azerbaijan.)

Russia, for its part, has also become more dependent on Azerbaijan for its own transit routes that skirt sanctions-imposing countries. As the Kremlin disengaged from the Caucasus to train its eyes on Ukraine, it opened the door for Azerbaijan’s close ally Türkiye to become the dominant regional power. 

Other global trends are helping Azerbaijan as well. Another key partner of Baku, Israel, has managed to weaken Iran, another Azerbaijani rival. In addition, Trump’s return to the White House promises a U.S. policy based explicitly on interests without claims to worry about liberal values, which also works to Azerbaijan’s advantage. 

All these developments have given Baku confidence that the geopolitical winds are at its back: the longer it waits, the more they will blow its way. As a result, the prevailing wisdom is that Azerbaijan has no need to resolve the conflict now when opportunities to exact more concessions from Armenia may appear down the line. (Baku may have more to gain on border delimitation, transit routes or any of the other outstanding issues between the sides.) On top of that, policymakers in Baku see a deal as benefiting Armenia more than them, making signing it a net loss from a zero-sum perspective. Hence, it is tempting to stick with the status quo. Azerbaijani decision-makers are “comfortable with the situation they have now”, a European diplomat said.[1]

Azerbaijan’s hard bargaining on the constitution makes many, including Armenian policymakers and some foreign diplomats, fear that Baku is not negotiating in good faith. “From Baku’s perspective, it’s the ‘perfect’ issue. It’s tough to argue that Armenia shouldn’t remove a formal territorial claim from its constitution. And it’s also incredibly difficult for Pashinyan to follow through on because of the domestic backlash”, said a Western diplomat. If that backlash results in the referendum’s failure, he added, “then it ‘proves’ that Armenia isn’t ready for peace”.[2]

That said, Azerbaijani officials insist that they have another agenda. They say they are looking for peace, but only on conditions that require Armenia to abandon its territorial pretensions. They push back against arguments that the demand for constitutional change is unreasonable, seeing it as necessary to eliminate revanchism in Armenian politics and society. They cite Ireland and North Macedonia as precedents for countries changing their constitutions for the sake of peace.[3] They are also adamant that a referendum is essential to lasting peace, saying Azerbaijan does not want future Armenian governments to be able to declare that Pashinyan changed the constitution illegitimately. “We want to sign peace with the people of Armenia”, one official said, explaining why he deems the plebiscite necessary.[4] Authorities in Baku also say they are confident that the referendum will pass, because they do not believe Armenians will vote against ending the conflict once and for all.[5]

Azerbaijani officials and experts argue that Pashinyan will make what they see as the necessary concessions, like the constitutional changes, only under duress. They recall how Pashinyan once took more strident positions on the conflict and question the sincerity of his conversion to peacemaker. In a notorious 2019 episode, he visited Shusha, which had been the centre of the ethnic Azerbaijani population in Nagorno-Karabakh before 1990, and declared “Karabakh is Armenia – full stop”.[6] They say he changed his position only because their military victories forced him to; now, they add, diplomatic pressure is needed to ensure that Armenians accept losing Karabakh for good. When he first took office, Pashinyan made “populist, contradictory, confusing statements and later denied them or said he was misinterpreted”, a senior official in Baku said.[7] “We cannot just take him at his word”, another said of the Armenian premier’s promises to embrace peace.[8]

Azerbaijani policymakers appear to believe that the need to push Armenia to make a constitutional change, and ensure it gains public approval, outweighs the risk that they will undermine the best negotiating partner they are likely to get; any potential replacement for Pashinyan would likely be far less inclined to compromise.[9] There is a grave risk, though, that they are miscalculating: their tactics could backfire if Armenian citizens refuse to ratify at the ballot box their country’s defeat on the battlefield. Foreign diplomats warn Azerbaijanis that their pressure on Armenia could easily prove counterproductive. But, as a European diplomat official told Crisis Group, those admonishments do not seem to be taken seriously.[10]

But many in Baku’s decision-making circles also see the gains that Azerbaijan could realise with a peace deal. Alongside the bellicose signals from Baku, there are other messages that emphasise the opportunities peace can bring. Shortly after Azerbaijan’s victory in 2023, a pro-government member of parliament wrote a widely discussed article putting forth an expansive vision for post-war Azerbaijan centred around Baku taking a leading foreign policy role in the Caucasus and the world. To replace the government’s previous laser-like focus on taking back Karabakh, the article envisaged a “Great Eurasian project – a new alliance involving Türkiye, Russia, Iran, Azerbaijan, Armenia and Georgia”.[1]

A large part of this vision is economic: with the oil and gas reserves that have generated revenue for decades finite and a population that skews young, the country’s leadership realises that the economy needs a new direction. Accordingly, Azerbaijan is aiming to become the hub of a greater Caspian region, serving as a central node of trade and transit through the Middle Corridor between Europe and Asia, as well as between Russia and the Gulf. This plan has become increasingly prominent in Aliyev’s meetings with European and Asian leaders, and it is a popular subject for state-affiliated commentators and think-tanks.[2] The “Trump route” would be just one step toward realising this broad vision. 

For this aspiration to be realised, Armenia’s involvement will be essential. While Azerbaijan has long had trade and energy links to Europe via Georgia, Türkiye and the Black Sea, Armenia’s closed borders with Azerbaijan and Türkiye have limited the Caucasus’s role as a connector. Routes from Azerbaijan via Armenia and Türkiye have advantages over the current routes via Georgia, as the former do not have to climb mountain passes that limit the number of wagons a train can carry.[1] They also could be put in place quickly by refurbishing Soviet-built roads and railways that have fallen into disrepair. The “Trump route” aims to provide a framework for this project, but critical details – including how and by whom customs, border control and security along the route would be run – still need to be resolved. 

Azerbaijani policymakers recognise that a peaceful Caucasus in general, and Armenian participation in particular, are necessary components of strengthening their connections to Europe and the rest of the world. “We want to see Armenia become part of the regional logistics and transport system”, a top presidential adviser says.[2] At the very least, a transport route created by territorial conquest would face sanctions similar to those that have discouraged European shippers from moving goods via Russia since 2022. Peace with Armenia also is a precondition for the outside investment that likely will be required to make the Caucasus a transit hub. If a deal is signed, a senior official said, Azerbaijan “will no longer be considered an area of ongoing conflict or war or confrontation. And of course, that will be a strong signal to outside economic and other investment players to be here and to support this region for its future development and stability”.[3]

Both Armenia and Azerbaijan now insist that the ball is in the other’s court. Armenia says it is ready to sign the peace deal any time Azerbaijan wants. Azerbaijan says it is up to Armenia to first prove that it truly seeks peace by removing the territorial claim from its constitution. But constitutional reform not only stands a strong chance of failure – scuttling the entire peace process with it. It also requires a year or more to complete. In that time, there is much that could go wrong: stray fire across the border could escalate into real fighting; internal instability in Armenia could make it politically risky to sign a deal; or an unsettled global environment could throw up some unforeseeable new challenge. 

Azerbaijan is concerned that Armenians with a nationalist, maximalist agenda could again come to power and seek to retake control of Karabakh. But pressure on Yerevan to change its constitution through a popular vote could prove counterproductive, stoking rather than alleviating that threat. A change in Armenia’s constitution to remove the references to Karabakh will not in itself eliminate irredentism from Armenian political culture. After all, any future Armenian government that believes it can take back Karabakh will not be constrained by what is or is not in the constitution. Meanwhile, pressure from Azerbaijan runs the serious risk of damaging Pashinyan’s efforts to sideline those same irredentist views in Armenia and weakening the best negotiating partner Baku is likely to have.[1] A peace deal, meanwhile, would open the door to the economic development and connectivity that could, over time, further undermine the appeal of such sentiments.

Behind closed doors, representatives of both countries have considered possible compromises. One would have them sign the agreement alongside a pledge by Armenia to change the constitution or with the proviso that the peace agreement would not be ratified until it alters the charter. There are also ways (as described above in Section IV) in which Armenia’s parliament might legislate away any formal claim to Karabakh, as imperfect as those solutions may be. While Aliyev has publicly stuck to a hard line on the constitution, he may be amenable to a deal. “If Azerbaijan came to believe that the peace agreement is the priority, it could easily back down somehow on the constitution”, a European diplomat said.[2]

International partners could help make the peace accord a priority by offering incentives to finalise it. The EU is preparing investment and assistance packages that would be contingent on Armenia and Azerbaijan reaching a peace agreement. Gulf states are considering similar proposals.[1] Following the Washington summit, the U.S. is poised to become a lead player in Caucasus transit policy. But it is unclear to what extent the U.S. intends to push the broader peace process or, for that matter, if the Trump administration is ready or has the capacity to follow through. Azerbaijan is eager to be part of European plans for Europe-Asia transport networks bypassing Russia, but real EU investment would require coming to an understanding with Armenia (as well as Georgia) on what the Caucasus routes would be.[2] Other possibilities for how the EU and other international partners could support the region following an agreement include humanitarian projects (such as demining in Azerbaijan) and reconstruction investment in areas that have been affected by war. 

The EU could also make reaching a peace deal more attractive and instil greater confidence in its terms by advancing plans to change the mandate of the EU Monitoring Mission in Armenia. While the mission has helped reassure Armenians afraid of an Azerbaijani attack, it also has irritated Azerbaijanis. Many Azerbaijanis resent the mission, seeing it as exemplifying a bias among EU policymakers toward Armenia, which has been strengthening its ties with the EU and several member states at the expense of its traditional ally, Russia. The peace agreement would require the monitors to move away from the border (see Section III), and there are discussions about how to reimagine the mandate of the mission. One possibility would be for it to become a technical assistance mission helping Armenia establish an integrated border management system, as the EU has done in a number of Central Asian countries.[3] Formalising those plans could provide an additional incentive to sign the deal.

The U.S., by brokering the August agreement, has now taken a degree of ownership of the negotiations. Continued attention to the “Trump route”, ensuring that it becomes the starting point for expanded trade, transit and connectivity in the Caucasus, would do much to build good-will between the sides. At the August meeting, President Trump asked Pashinyan and Aliyev to “call me” in the event that a dispute arises over the accord. There are reasons to doubt that Washington, and in particular Trump, will sustain an interest in brokering peace, but for now both Caucasus leaders are eager to stay on the president’s good side, which could serve to foster cooperation. At the same time, U.S. policymakers should avoid rhetoric that suggest their involvement aims to weaken geopolitical rivals, lest they stir Russian and/or Iranian opposition. While Moscow and Tehran have, for now, both responded to Washington’s initiative cautiously, they remain potential spoilers. 

Meanwhile, Armenia and Azerbaijan could also pursue, and their foreign partners should encourage, confidence-building measures that would reduce the risk of tensions spiralling out of control. One could be an agreement to demilitarise the borderlands and open more communication channels between the two militaries so that ceasefire violations do not escalate. The two sides’ respective commissions on missing persons held two meetings early in the year, and as cooperation advances, they may need expert assistance that partner countries could provide.[4] Building confidence will increase the trust between the two sides that could make it easier to approve the agreement, while also mitigating the security risks that could derail the peace process. 

Lasting peace between Armenia and Azerbaijan, two adversaries that have each suffered grievously at the other’s hands, cannot be built by seeking to maximise near-term tactical advantage. Building trust, accepting and reciprocating gestures toward reconciliation, and starting the long process of creating new forms of cooperation and neighbourliness will all be crucial for establishing stable relations between the sides.

Armenia and Azerbaijan have already made remarkable progress in resolving their conflict. Despite the lack of trust and the many grievances that remain between the two sides, they are delimiting and demarcating their border. They are working on sensitive issues such as the fate of persons who went missing during past wars. Above all, they have drafted a peace agreement – all bilaterally, with no outside mediation. With the August statement witnessed by President Trump, they also have the U.S. imprimatur upon their plan for peace.

The peace deal is not perfect, and it is far from enough to guarantee a definitive end to conflict between Armenia and Azerbaijan. But it is a crucial start. Armenia and Azerbaijan, both of whom stand to benefit enormously if they can consolidate and implement the deal initialled in Washington, should find a compromise to the constitution issue. Their outside partners should nudge them toward peace by helping the region join the world economy. It would lay a foundation for future political, economic and people-to-people cooperation, as well as, eventually, the difficult work of reconciliation, allowing these two countries and their neighbours to prosper.

Yerevan/Baku/Brussels, 5 September 2025