Hopes are running high among Azerbaijani observers that a pending summit between Armenian President Robert Kocharian and Azerbaijani President Ilham Aliyev will clear the way for a Nagorno-Karabakh peace settlement. Officials have been relatively cautious in evaluating pre-summit discussions, but some analysts note that, with Azerbaijan's domestic opposition badly splintered, Aliyev could be poised to strike a deal with Armenia.

Azerbaijani Foreign Minister Elmar Mammadyarov and Armenian Foreign Minister Vardan Oskanian were relatively reserved, but upbeat in assessing their January 18-19 meeting in London. The Baku daily newspaper Echo quoted Mammadyarov as saying that the talks were "intensive and full," while Oskanian termed them "positive."

A half-page working document on guidelines for further negotiations was the only tangible result of the talks, however. "The main purpose of the meeting was to prepare for the meeting of the presidents, discuss some issues and agree on the time and venue of the meeting," said Novruz Mammadov, head of the Presidential Office's International Relations Department, APA news agency reported.

For now, no date for the meeting has been set. The Russian newspaper Vremya Novostei has reported that the presidential summit has already been scheduled for February 10, although both Oskanian and Mammadyarov have stated that France, which will host the Aliyev-Kocharian meeting, is still considering possible dates. Azerbaijani Foreign Ministry spokesperson Tahir Tagizada told the Trend news agency on January 20 that the meeting would take place during the first 10 days of February.

International experts believe Armenia and Azerbaijan are perhaps closer than ever before in settling the Karabakh conflict. [For background see the Eurasia Insight archive]. "Our understanding and our feeling is that there will be a progress in the talks, especially in 2006. And we are very much hopeful that the settlement will be possibly found,' Trend quoted Sabina Freizer, Caucasus project director for the Crisis Group, in late 2005.

Such an agreement would necessitate painful compromises by both Azerbaijan and Armenia. Reportedly, Azerbaijan might agree that Karabakh's status could be decided in a referendum to be held in the territory; in exchange, Armenia might agree to pull out troops from five Armenian-occupied regions of Azerbaijan. [For background see the Eurasia Insight archive].

It is widely believed in Baku that President Aliyev has consolidated his power sufficiently to be able to make painful compromises. Organized political resistance to Aliyev's policies has lost its intensity, as opposition parties bicker among themselves over their response to the results of the November 2005 parliamentary elections, a vote seen as fixed. [For background see EurasiaNet's special feature]. "After the elections, the opposition is demoralized and the public is passive. Using this situation, President Aliyev might take a decisive action and earn more legitimacy in the eyes of the international community," said Tabib Huseynov, an independent expert on the Karabakh conflict.

Azerbaijani opposition leaders, who late last year dismissed the results of any referendum in Karabakh as a foregone conclusion, appear to see the idea of a settlement with Armenia as a potential weak spot for Aliyev. On January 22, the opposition daily Yeni Musavat told readers that a "sell-out peace agreement might be signed in Paris."

For Baku, a referendum on Karabakh's status remains a potential sticking point to any deal with Yerevan. Some analysts believe Azerbaijani leaders are proposing that a referendum be held in 10-15 years from the signing of a peace deal, evidently hoping that Azerbaijan's ongoing economic boom would help dissuade Karabakh Armenians from seeking independence from Baku. Such a time lag would also allow the two sides to establish confidence-building measures, such as the exchange of prisoners, the development of contacts among non-governmental organizations, and the resumption of diplomatic relations and economic ties.

Yet several independent experts in Baku believe that a referendum will only work against Azerbaijan. Arif Yunus, a political scientist at the Institute of Peace and Democracy said in an interview published by the 525-ci Qazet newspaper, "Principally, holding a referendum today or in 15 years does not make any difference. Armenians will not abandon their plans. And this [referendum] idea cannot satisfy Azerbaijan's interests." Another political scientist, Ilgar Mammadov believes that the Azerbaijani government played with the idea of a referendum on Karabakh's status in order to gain concessions from the West on Azerbaijan's recent parliamentary elections. "Now that the elections are over, this talk will die out," Mammadov suggested. [For additional information see the Eurasia Insight archive].

In a January 19 interview with APA news agency, Novruz Mammadov did not deny that the idea of a referendum remains open for discussion, but stated that "it is too early to talk about that. Our main goal now is to settle the conflict, liberate the occupied territories and return IDPs [Internally Displaced Persons] to their homes."

Another point of contention for the Azerbaijani side is the geographic scope of any future referendum. The Azerbaijani press has reported that authorities may be trying to establish safeguards that protect Baku's interests into any Karabakh referendum process. Some have suggested that Azerbaijan's Constitutional Court, or a national referendum held within Azerbaijan would have to approve the results of a Karabakh plebiscite before it could go into effect. Another possible option reportedly under discussion is holding two separate referendums for Karabakh's ethnic Armenian and Azeri communities.

Aside from the international community, attention is also focused on Moscow, which has taken a more active role in the recent talks. Mammadyarov's and Oskanian's recent meeting took place at the Russian embassy in London, a gesture seen as significant. Both Russian President Vladimir Putin and Defense Minister Sergei Ivanov are also soon expected to pay visits to Armenia and Azerbaijan.