The fighting has also been used as a pretext for Turkey, under severe pressure from its Azeri allies and ethnic cousins, to withdraw a goodwill offer of 300 million kwh of electricity to Armenia from 1 December. The Azeri President, Abulfaz Elchibey, on Thursday declared a state of emergency in the area. Armenia's presidential spokesman, Reuben Shugarian, said the attack was made to silence Azeri guns after shelling and aerial bombardment of the Armenian town of Zangezur killed 59 civilians.
Diplomats in Baku said the upsurge of fighting had caused Azerbaijan to back out of a peace process that had brought the two countries closer than ever at a secret meeting in Geneva in early December between representatives of Armenia, Azerbaijan, the United States, Russia and Turkey. 'There is an overall feeling of a positive trend, with Turkey playing an intelligent and responsible mediating role,' said one Western diplomat in Ankara.
The initiative had grown out of the broader but stalemated 'Minsk process' meetings in Rome, as well as a recognition by all sides that the conflict over who ruled Karabakh's 180,000 people was hurting everyone's interests and helping no one.
The Armenian President, Levon Ter Petrossian, seems ready to compromise on the question of whether Azerbaijan could retain sovereignty over the mainly Armenian-populated enclave. 'The president will have enough courage to try to explain to the people . . . that the only way to come out is first peace, then status in the next round,' said Mr Shugarian. 'If there are international guarantees for the population, there can be a compromise on status. First we must establish a ceasefire.'
Such a compromise is, however, anathema both to the main opposition nationalist Dashnakstutiun party and to the local 'Karabakhchis', who, under Dashnak rule, refuse to contemplate Azeri sovereignty.
With around 25 per cent of Nagorny Karabakh won back by Azerbaijani forces since Mr Elchibey took power in June, Armenian fighters are also wary about giving back the corridor they opened up between Armenia and Nagorny Karabakh.