This dissertation is broken up into 5 chapters on Virtual Azerbaijan (VAR):
Future Prospects and Conclusions
"Great Powers will do as they may and small powers will do as they must."
The ancient Greek Historian Thucidides.
The Karabakh dispute is seen as the main factor of instability in the South Caucasus. A Russian mediated cease - fire stopped a bitter Armenian - Azerbaijan war five years ago, but no serious progress has yet been made in OSCE sponsored peace talks. The shakiness of the cease - fire was demonstrated in the middle of June during a brief outbreak of fighting betwenn Armenia and Azerbaijan forces along the notheastern section of Karabakh's border. Conversely, the fighting may not have had a strategic aim, but revealed the degree of tension on the contact line and convinced the parties, that a new peace propcess is needed.
Therefore, by Washington's encouragement on 16th July and the 22nd August in Geneva, Armenain and Azerbaijan Presidents had a private meeting without the attendance of journalists.  Each president praised the talks and his counterparts suggested that the meeting may have inaugurated new peace talks.
In Geneva, Aliyev and Kocharian indicated that they may be able to compromise: Armenia no longer insists on complete adherance to the last OSCE proposal for a “common state”, and Azerbaijan no longer insists on complete adherance to the last OSCE's 1996 Lisbon declaration. Moreover, both sides suggested that they would seek a compromise on Karabakh's status according to the formula, "less than independence, more than autonomy." 
Despite the fact that continuing negotiations between the two Presidents seems to be very impressive, opposition on both sides criticise their Presidents. In Baku, opposition leaders such as Etiber Mamedov and Isa Gambar, charged that H.Aliyev was "bowing to pressure from great powers", meaning the United States, that he had "embarked on a policy of concessions" and that his frequent statements about the need for a compromise, aroused concern. 
For its part President Kocharian received a stern warning from the Foreign Minister of the "Nagorno - Karabakh Republic", claiming that "we are not going to hold negotiations between independence and a common state." 
It is essential to note that since Kocharian came to power, his diplomacy over the Karabakh issue became more compliant and compromisable. In contrast to this, just one year ago, he was criticising his former counterpart Ter - Petrosian as "traitor." There are several reasons behind Kocharain's foreign policy changes:
First of all, Azerbaijan's efforts to tap its oil reserves, have been a source of concern for Armenia. Possessing few natural resources, Armenia has generated little interest among international businessmen, while Western oilmen have flocked to see Baku. Therfore Armenia sees the rise of a potentially strong, wealthy nation as the logical result of Azeri's oil development.
Secondly, land - locked Armenia, the target of the blockade by Azerbaijan and Turkey, and the smallest of the Caucasian states, has been hardest hit by the interruption of transport and communications. Its prospects for economic recovery lie in producing for regional export markets, and in resuming its historical role as a transit route for North - South and East - West trade. Moreover, as Michael Croissant points out, although the window of opportunity for "a peace pipeline" has closed, it is not too late for Armenia to enjoy some of the benefits of regional oil development. Proposals for a common Caucasian market and a Eurasian transport corridor  depict the Caucasus as a region of vigorous East - West economic activity in the twenty first century.
Thirdly, as Nikolai Hovannisian claims, Armenia needs to develop its economic links with the West more than its need for humanitarian aid.  To put it simply, Armenia is the third largest per capita recipient of US foreign aid (after Israel and Eygpt) in the world.
Despite the fact that the Armenian lobby  in USA and France extends great humanitarian aid to Karabakh Armenian's and Armenia, it is not an investment to Armenian economy and it will do more than alleviate the isolation caused by the Azeri-Turkish blockade. On the other hand, Iran is currently the only neighbouring country with which Armenia has both reasonably good relations and significant trade. Neverthless, Iran can provide Armenia with limited diplomatic, financial or military support, in part because closer ties with Iran would offend Washington.
After that, the Clinton Administration has made the resolution of the Karabakh conflict, a top foreign policy priority. To this end, it has been argued for evenhandedness in US relations with Azerbaijan and Armenia, which it feels requires the lifting of Section 907 restrictions  on US government to governmental aid of Azerbaijan. To date, Armenian's supporters in Congress have been able to block these plans. Notwithstanding, Yerevan was to prove unreasonably obstinate pressure to lift section 907, a move that has been vigorously advocated by the US Jewish Lobby.
Armenia has cause to worry about increased Azeri military spending, particularly after oil revenues begin flowing into the country. Armenians cannot be confident that the balance of military power is clearly in their favour, even today. Azerbaijan has some 87,000 men and women in arms, compared to Armenia's 60,000 and Karabakh's 20,000. 
Finally, Azerbaiajan has used its benefit for the world community's preferenece for the principle of territorial integrity, over that of self - determination. Talks have focused not on whether Karabakh's right to decide its own future independent of Baku will be recognised, but on what status it will be accorded as a constituent region of Azerbaijan. Therefore, the publics increased importance to Western governments, translate gradually into increased pressure on the Armenian side.
For, all these reasons, Kocharian's former counterpart Ter- Petrossian claimed that political future besides Armenia's and Karabakh's prosperity and security require a compromise. Now, Ter - Petrossian's success faces the same problems.
For its part, there are several reasons for Azerbaijan's compromise:
Firstly, Aliyev is under serious pressure from the international community. On the other hand, there is a gradual strengthening of Iranian, Russian and Armenian pressure in Azerbaijan, and by alternating the position of US official bodies, which are far from the position of allies, have left the Azeri President in an impasse. 
Secondly, accelerating a solution to the Karabakh problem, could be part of Aliyev's succession plans. It is possible that H.Aliyev's intensifying of processes around resolving the Karabakh conflict, is aimed at sparing Ilhaim Aliyev (Presidents son) a painful problem. There is no doubt that H.Aliyev intends to undertake all the responsibility for reslolving the Karabakh conflict and hence, create peaceful construction opportunities for Ilhaim Aliyev, before he transfers power to his son. There is some logic behind this. In other words, at seventy seven years old, H. Aliyev is the only Gaurantor of stabilty in the region. His sudden death could alter the strategic situation in the region almost overnight.
Finally, despite the fact that Azerbaiajan has signed numerous oil contracts and also started to sell its oil to Western markets, it is clear that Azerbaiajan can not develop its economy while Caucasian economy as a whole, is undeveloped. Furthermore, geopolitical interests behind the pipelines gives an uneasy task to Azerbaiajan to develop its oil and gas fields.
After analysing reasons behind the compromise, it is obvious that both sides will try to resolve the deadlocked Karabakh issue, otherwise in the long run, the conflict would likely fall into one of two patterns: either a frozen impasse lasting for many years as in Cyprus, or worse and more likely, periodic military clashes or even full scale wars, as in the Arab - Israeli conflict.
As was previously mentioned, the Nagorno - Karabakh conflict is one of the bloodiest and most intractable clashes to emerge from the collapse of the Soviet Union. Furthermore, it is the only post - Soviet conflict that poses a potentially explosive threat to peace and security not just in the region, but in future this could become an international matter. With the implementation of "glasnost" and "perestroika" at the end of the 1980's, the Soviet leader opened a Pandora's Box of grievances, which had been suppressed by seventy years of Communist rule. Since 1988, the dispute between Armenia and Azerbaijan has brought untold destruction and hardship to both sides. As a result of the war, nearly thirty thousand lives have been lost and scores of towns and villages have been destroyed. There are nearly one million Azeri's that have become displaced from their homes during the fighting and forced to live a squalid existence in Baku and other parts of the region. Meanwhile, the Karabakh Armenian's remain armed to the teeth, mainly with Russian weapons that are at least partly paid for with cash from the Armenian Diaspora in the USA and France. In the long run, the biggest obstacle lies in the isolation and suspicion of the Karabakh Armenians.
Even though, the Karabakh issue is steeped in the language of self- determination and the inviolability of borders, the conflict is a struggle for the soul of Armenian and Azerbaijanian peoples. For example, Armenia's Defence Minister Vasgen Sarksian, has called Armenian's "to fight our last war to the finish with "barbarian Turks"  (Azeri) for their part, Azeri's call Armenian's "murdar kavur" , and they view Karabakh as a heartland of the Turkic people. To challenge Baku's sovereignty over the territory of Azerbaijan is, in the view of the Azeri's, to challenge the very foundation of Azeri identity. 
According to Michael Croissant, national histriographies have been created to legitimate both sides claims, and they have been greatly influenced by collective memories of history, as interpreted through the eyes of the Armenian and Azeri's. These collective memories, which draw on personal, family and community experiences and recollections, shape the national consciousness of both peoples and provide a lens through which they view current events. Moreover, too often on each side, attention focus on the destruction and injustice they have suffered as a people, while the suffering they inflicted, is ignored.
International efforts by the UN, CSCE, Russia, Iran and Turkey over the past six years, to mediate an end to the Karabakh dispute, have failed on the notion that a political document for such tangible things like the withdrawal of military forces, the return of refugees, and the deployment of multinational peacekeepers, will promote peace between two nations. However, continuing Aliyev- Kocharian's private meeting on the principle of "lower than independence, but much higher than autonomy", for Nagorno - Karabakh gives an optimistic future for the outlook of resolving conflict.
Furthermore, the strategic location and resources of the Caucasus will virtually guarantee the continued interest of great powers such as USA, Russia, United Kingdom and regional powers such as Turkey and Iran, seeking influence in areas at the expense of their rivals. There is no doubt that Washington and NATO are playing the great game in the Caucasus and Central Asia. The wider game is only just beginning, while Washington is trying to decrease the tension in the Balkans, at the same time there are increased tensions in the Caucasus.
Compromise also, have to replace competition in the oil pipeline interests, otherwise a more provoked in the Caucasus will bring poverty and bloodshed to any side in the region, with no clear winner. The resolution of the Armenian - Azerbaijan conflict and oil pipeline issue, will depend on how successfully great powers seek to end the competition for primacy and control in the region. Hence, while co - operation rather than competition between Great powers becomes the norm in the Caucasus, the Nagorno - Karabakh conflict, is likely to remain a dark and uncertain future.
 Azerbaijan News Distribution List "Habarlar-L", Kocharian, Aliyev under domestic political fire after Geneva meeting, 26 August 1999. Monitor - 5(156).
 Kocharian, Aliyev under domestic political fire after Geneva meeting. 26August 1999.
 Shiraz Memmedli "Aliyev Rejiminin belasi" Musavat 20 July, 1999. 163 (805).
 Kocharian, Aliyev under domestic political fire after Geneva meeting. 26 August, 1999.
 The European Union (EU) sponsored TRACECA (Transport Corridor Europe - Caucasus - Asia) scheme, launched in 1993, to develop the transport link from Western Europe to China via the Caucasus, the Caspain and Central Asia. The EU and the World Bank have all invested significant sums in TRACECA related projects in both Georgia and Azerbaijan. The permanant secratariat of TRACECA established in Baku. See: Edmund Kerzig, , The New Caucasus: Armenia, Azerbaijan and Georgia, 140 - 141.
 Nikolai Hovannisian, The Republic of Armenia: Politic and Diplomacy, `(http://socrates.berkurley??.edu/^bsp/caucasus/hovannis.html)
 As Sergio Mikoyan points out, the Armenian lobby in the USA has proven even more powerful than Armenia as a state. One of the Armenain Diaspora leaders Kirk Kirkorian, is planning to invest $125 million in highway construction to link Armenia with Georgia's Black Sea ports, and road links between Yerevan and Thilisi. Armenian Diaspora also paid for the construction of a new road connecting Armenia with Karabakh is the Lachin corridor. See: Sergio A. Mikoyan Russia, “The US and Regional Conflict in Eurasia” Survival, Autumn 1998. vol.40(3), 118 . See Razmik Panossian, "The Armenians: Conflicting Identities and the Politics of Division" in Charles King and Neil T. Melvin eds., Nations Abroad (Oxford: Westview Press, 1998).
 Sonja Winter , Central Asia; US says Resolving Conflicts a Top Priority RFE/RL, 22 July 1997.
 In 1992, the USA was preparing to provide assistance to the newly independent states of the former USSR. As Congress was agreeing on the final provisions of the new landmark legislation which would be known as the Freedom Support Act of 1992, the Armenian lobby succeeded in inserting a section known as Section 907, into the law that had prohibited the US government from providing direct assistance of any type to Azerbaijan, as long as the war continued and as long as the Azerbaijan "blockade" Armenia. However, since 1997,US Congress approved several changes to section 907. See: Wallace F. Hays, US Congress and the Caspian: ThePolitical Debate (http://hourworld.compuserve.com/homepages/usaserb/333.html).
 Edward W. Walker, “No Peace, No War in the Caucasus" ,42 -43.
 BBC Summary of World Broadcasts, Aliyev said to plan compromise to resolve Karabakh conflict August 7 1999.
 "Aravot" (Yerevan) carried by Noyan - Tapan, 27th October 1997.
 The word "kavur" used by the Turks and Azeri's to call non - Muslim peoples. While Turks were calling Greeks "kavur", in the same way Azeri's call Armenians. The meaning of "Murdar kavur" is "dirty Armenian".
 Nora Dudwich "Armenian - Azerbaijanian Relations and Karabakh: History, Memory and Politics" Armenian Review 46, 1(4) 1993,76.
Copyright © 1999-2001 by Dadash Alishov. All rights reserved.
Web presentation with exclusive permission from the author.
Copyright © 2001 by Virtual Azerbaijan (VAR).