The new year appears to be bringing in a new peace deal for Azerbaijan and Armenia, as both sides seem intent on moving forward. After months of diplomatic stagnation, efforts to normalize relations likely entered a new stage on December 7 when Azerbaijan and Armenia released a joint statement after concluding bilateral border discussions. Both sides recognized their “intention to normalize relations and to reach the peace treaty on the basis of respect for the principles of sovereignty and territorial integrity” and described this moment as an “historic opportunity.” 

In concrete terms, the statement announced several immediate trust-building steps, including the mutual release of prisoners and Armenia’s support for Azerbaijan's candidacy to host the COP29 climate conference. This statement was followed up by a December 26 sit-down between Azerbaijani President Ilham Aliyev and Armenian Prime Minister Nikol Pashinyan in St. Petersburg, Russia, on the sidelines of a Commonwealth of Independent States(CIS) meeting.

The bilateral nature of recent progress on normalization is especially noteworthy. October, November, and December saw a series of mediation efforts by outside powers (the European Union, United States, Russia, and Georgia) fall by the wayside, with Armenia and Azerbaijan each preferring different partners. The fact that the two sides are now meeting without any mediator at all speaks to what may be increasing regionalization of the South Caucasus politics that parallel increasing political, economic, and security ties between Georgia and Azerbaijan, as well as Pashinyan’s own effort to provide a post-conflict regional infrastructure and trade plan. If Armenia and Azerbaijan strike a final deal without outside mediation, it would be an even stronger sign of political connectivity. 

Although there are still many details to be hashed out, Azerbaijan sees an end in sight. Speaking with The Guardian in late December, Azerbaijani special ambassador Elchin Amirbayov communicated strong optimism about a peace deal, stating that the two sides were “not that much far away from the final agreement.” Roughly echoing Pashinyan’s statements from last October, Amirbayov relayed that major principles had all been agreed to by both sides, including “mutual respect for each other’s territorial integrity, sovereignty and inviolability of internationally recognized borders, rejection of any territorial claims to each other, now and in the future, rejection of any acts that would run counter to the UN charter, like the use of force or threat of use of force, but also delimitation of the border between Armenia and Azerbaijan.” 

The reference to the use of force is likely, in part, due to ongoing concerns that Azerbaijan would militarily impose a transport corridor through southern Armenia connecting Azerbaijan to its exclave, Nakhchivan. Amirbayov called this fear “nonsensical,” especially given that Azerbaijan had moved to open an alternative route through Iran.

A few possible risk factors have made it difficult for policymakers to push forward a deal. One of the most significant potential obstacles stems from the strength of opinion among some segments of Armenian society, where Pashinyan’s perceived inability or unwillingness to defend the Karabakh Armenians generated outrage and street protests. While opinion might have evolved, a poll from June 2023 found 82% of Armenians rejected Pashinyan’s decision to recognize Karabakh as part of Azerbaijan and very limited support for a compromise with Azerbaijan. Major institutions, perhaps most notably the Armenian Apostolic Church, have broken with Pashinyan over Karabakh. Former leaders of the separatist administration of Karabakh have recently voiced a desire to go back on the September ceasefire agreement that entailed the complete dissolution of the separatist governing institutions by the end of 2023. 

But the protests that followed September's fighting over Karabakh have mostly fizzled out, and Prime Minister Pashinyan has committed to normalizing relations with Azerbaijan. The defeat of Karabakh separatism and the displacement of nearly all of its population will likely remain traumas for much of Armenian society for years to come.  But the fact that Pashinyan and the current parliament will hold their positions at least until national elections in 2026, coupled with the weakness of Armenia’s opposition, has given Armenian policymakers the maneuvering room to prioritize pragmatic goals. Pashinyan’s recent emphasis on placing economic growth at the forefront of politics demonstrates this, as does his interest in reopening the border with Turkey, Armenia's largest economic neighbor. 

Border delineation, exclaves, prisoners, and even the potential return of displaced Armenians seem to all be manageable issues that have not hampered a drive toward normalization. It will be up to Yerevan and Baku to build on the momentum of recent steps forward with further action. But with bilateral talks now bearing fruit, it appears nearly all signs point to an impending normalization of relations.