Fears over ceasefire as Armenian president quits

A pulse of alarm swept outwards from the Trans-Caucasus through Moscow and Washington yesterday as the contours became clear of the political crisis in Armenia.

The resignation of President Levon Ter-Petrossian was widely viewed as a triumph for nationalists who oppose compromise in the settlement over Nagorny-Karabakh - the issue that led to a war with Azerbaijan in which 25,000 died. The tension was such in the region yesterday that his Azeri counterpart, Haidar Aliyev, called an emergency meeting of his Security Council. Afterwards he pledged to uphold the ceasefire which has held for more than three years.

The departure of Mr Ter-Petrossian, a 53-year-old former academic, marks the end of a presidency in which he squandered his early reputation for being a democrat by clamping down on his opponents. His re-election in 1996 was marred by allegations of vote-rigging. He presided over a period in which the nation of 3.5 million people nose-dived economically and watched in alarm as the United States, once an ardent supporter, was drawn by Caspian oil to woo neighbouring Azerbaijan.

Washington was not alone; every other country (except Armenia) in the region stands to benefit directly from the oil.

Fearful of isolation, Armenia found itself refurbishing its traditional ties with Moscow and Iran, the chief source of its consumer goods. Yesterday Boris Yeltsin underscored the relationship: "We must must not, and shall not, lose Armenia," he said after expressing regret at the president's departure.

But the unsettled issue of Nagorny-Karabakh, a mountainous enclave of ethnic Armenians which Stalin placed in Azerbaijan, overarched everything. Mediation attempts by the Minsk Group of the Organisation of Security and Cooperation in Europe - chaired by France, Russia and the US - have so far failed to resolve the key issues, which include a demand by Azerbaijan for the return of a large swathe of Azeri territory seized during the war.

- Phil Reeves, Moscow