Foreign Policy: Caucasus enters new chapter with Azerbaijan-Armenia deal

Foreign Policy described the August 8 signing of a framework peace agreement between Azerbaijan and Armenia in Washington as a turning point in one of the South Caucasus’s longest and bloodiest disputes.

Hosted at the White House, the ceremony brought together Azerbaijani President Ilham Aliyev, Armenian Prime Minister Nikol Pashinyan and U.S. President Donald Trump, underscoring Washington’s direct role in reshaping a region long dominated by Russia, Türkiye and Iran.

The preliminary deal, months in the making, seeks to lay the foundation for a final treaty that would end decades of hostility, unlock trade routes and attract foreign investment. According to U.S. officials involved in the talks, the Trump administration expects a comprehensive agreement to be signed and ratified by the end of 2026.

The outlines of peace have been clear for some time: mutual recognition of territorial integrity—including Azerbaijan’s sovereignty over Karabakh—formal border demarcation, diplomatic normalisation and renunciation of legal claims. In March, both governments confirmed agreement on these principles.

Azerbaijan’s decisive military victories—the 2020 Second Karabakh War and its 2023 operation to retake remaining Armenian-occupied areas—created what observers call an “irreversible new reality.” To his “immense credit,” analyst Jeffrey Mankoff noted, Pashinyan accepted defeat and sought peace, recognising the need for a permanent settlement.

Yet the process remains fraught. Contentious issues include Baku’s demand for an unhindered corridor across Armenia to its Nakhchivan exclave, as well as calls for constitutional changes in Yerevan that would confirm Armenia’s acceptance of the loss of Karabakh.

Washington’s behind-the-scenes diplomacy reportedly included a proposal granting the United States exclusive development rights over the planned corridor to avert clashes.

The agreement promises broad benefits. For Azerbaijan, a closer strategic partnership with Washington could include new energy and infrastructure investment, alongside the easing of restrictions on defence cooperation.

Armenia would gain from security ties with the United States and the potential reopening of its long-sealed borders with both Azerbaijan and Türkiye. Reintegrating into regional trade and transit networks could offer Yerevan a major economic boost.

Regional integration is also central to U.S. objectives. A functioning peace would strengthen the so-called Middle Corridor, a trade route linking China to Europe via Central Asia and the South Caucasus. Expanding this route would diminish Russia’s leverage in Eurasia, aligning with Washington’s broader strategic aims.

Still, obstacles remain. In Azerbaijan, delays in promised U.S. concessions could prompt Baku to reassess its commitment. In Armenia, domestic instability—highlighted by what authorities described as an attempted coup against Pashinyan—underscores the political risks. Trust between the two societies also remains low after more than three decades of conflict and mutual hostility.

The deal has drawn sharp reactions from Moscow and Tehran. Russian air strikes on Azerbaijani-owned energy facilities in Ukraine after the signing ceremony were widely seen as a warning, while Iran has openly rejected any U.S. role in the Caucasus. Both powers retain deep influence in Armenia and could move to disrupt the peace process.

Even so, the White House is betting that economic opportunities and enhanced security guarantees will anchor both Baku and Yerevan within a new regional order. Analysts caution, however, that Washington must weigh whether it is prepared to confront Russia or Iran should tensions escalate.

For now, the framework stands as a landmark achievement. Bringing Armenia and Azerbaijan to the negotiating table required “persistence and creativity” from Washington, supported by France in easing Armenian concerns. Whether it leads to a durable peace will depend on sustained political will and careful diplomacy.

By Aghakazim Guliyev