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Meeting in Sochi on January 25 with Russian President Dmitry Medvedev, the presidents of Armenia and Azerbaijan, Serzh Sarkisian and Ilham Aliyev, reached verbal agreement on the wording of the preamble of the most recent revised version of the "Madrid Principles" that constitute the outline of a more comprehensive Karabakh peace agreement, Russian Foreign Minister Sergei Lavrov told journalists.

Lavrov added that the two sides will prepare "concrete ideas and formulations" to be inserted in those points of the revised text on which they still disagree.

The original Madrid Principles were presented to the Armenian and Azerbaijani foreign ministers at the OSCE ministerial conference in Madrid in November 2007, and were in turn a revised version of the Basic Principles unveiled by the OSCE Minsk Group co-chairmen in the early summer of 2006 and posted on the website of the U.S. Embassy in Yerevan.

They included the phased withdrawal of Armenian troops from five Azerbaijani territories bordering on Nagorno-Karabakh, with special separate arrangements for two further districts of Azerbaijan -- Kelbacar and Lachin -- that separate Nagorno-Karabakh from the Republic of Armenia.

The phased withdrawal would be followed by the demilitarization of those territories; the deployment of an international peacekeeping force; demining, reconstruction, and the return to those Azerbaijani districts of the population who were forced to flee during hostilities in 1992-93; and, finally, at some unspecified future date, a referendum or popular vote on the final legal status of Nagorno-Karabakh.

Over the next 18 months, senior officials from Armenia and Azerbaijan reached agreement on some of those points. But they reportedly made little or no progress towards agreeing on the specific time frame for the withdrawal of Armenian forces from the occupied Azerbaijani territories, or on the modalities of the decision on the future status of Nagorno-Karabakh. Azerbaijan continues to exist that that final status must be compatible with preserving the territorial integrity of the Azerbaijan Republic.

It was in an effort to expedite agreement that Medvedev invited Aliyev and Sarkisian to Moscow in November 2008. Those talks yielded the first ever formal written accord in the entire 16 years of the mediation process. In that "Declaration On Regulating the Nagorno-Karabakh Conflict," the three presidents reaffirmed their shared commitment to seeking a political solution to the conflict "on the basis of the norms and principles of international law," thereby implicating eschewing the military solution that President Aliyev had periodically threatened.

They stressed the importance of the ongoing mediation effort by the OSCE Minsk Group, and specifically of the Madrid Principles as the blueprint for a formal settlement of the conflict. And they agreed that the search for a peaceful solution should be accompanied by "legally binding international guarantees of all its aspects and stages."

Then at the Group of Eight (G8) summit in Italy in July 2009, the presidents of France, Russia, and the United States (the three countries that jointly co-chair the OSCE Minsk Group) announced that they had asked the co-chairmen to draft and submit to the two presidents "an updated version" of the Madrid Principles. They noted that those principles represent "a reasonable compromise" between the principles of equal rights and self-determination of peoples, on the one hand, and territorial integrity on the other, together with the nonuse of force. All three principles are enshrined in the Helsinki Final Act of 1975.

They further asked the Armenian and Azerbaijani presidents "to resolve the few differences remaining between them and finalize their agreement on these Basic Principles," which are to serve as the nucleus of "a comprehensive settlement."

The OSCE press release making public that July statement appended a brief summary of the Basic Principles. The slight but significant discrepancies between that summary and the original version made public in June 2006 triggered a storm of criticism in Yerevan, with opposition politicians accusing Sarkisian of agreeing to concessions detrimental to Armenia's national interests.

Those critics pointed out that while the original principles referred to a "phased" withdrawal of Armenian forces from the Azerbaijani occupied districts, the modifying adjective "phased' is absent from the 2009 summary, which did not specifically allow for the withdrawal from Lachin and Kelbacar to be delayed. The leadership of the unrecognized Nagorno-Karabakh Republic (NKR) insists that those two districts should not be returned to Azerbaijani control until after the region's final status is decided. Furthermore, the 2009 summary of the Basic Principles says that status should be decided by "a legally binding expression of will"; it does not use the term "referendum."

Aliyev and Sarkisian have met four times since the release of that G8 statement: in Moscow (July 17), Chisinau (October 8), Munich (November 22), and then yesterday in Sochi. The co-chairs said after the Munich meeting, which they described as "very constructive," that the two presidents engaged in "detailed and in-depth discussions" on all the basic elements that have yet to be agreed on.

The Russian daily "Vremya novostei" on November 23 quoted an unidentified "source close to the talks" as saying that the Munich discussion focused on the nature of the "temporary status" to be bestowed on the NKR after the signing of a formal settlement and pending the holding of a referendum on its final status; the wording of the preamble to the settlement agreement; and the future status of the Lachin Corridor that forms a land bridge between the NKR and Armenia.

The fact that Aliyev and Sarkisian have now reached agreement on the wording of the preamble to the new version of the Madrid Principles is a small step forward insofar as that preamble is certain to reaffirm their shared commitment to a peaceful settlement within the framework of international law. In that respect, it constitutes a retreat by President Aliyev from his bellicose rhetoric of recent months, which the co-chairs in November said was "not helpful."

For Aliyev, now is the optimum moment to be seen as demonstrating apparent willingness to compromise. While no one with any knowledge of Azerbaijani politics doubts for a moment that the parliamentary elections due this fall will result in an absolute majority for the ruling Yeni Azerbaycan Party, the authorities will not want to take any step that could galvanize popular opposition in the run-up to the vote.

Specifically, Aliyev is highly unlikely to sign the Madrid Principles before the election, because doing so would open the door to the final, crucial phase of talks on expanding the Basic/Madrid Principles into a detailed, full-fledged settlement. Representatives of the NKR are entitled to participate in that final stage.

At the same time, the significance of the two presidents' agreement on the wording of the preamble to the Madrid Principles should not be overestimated. As former Armenian Foreign Minister Vartan Oskanian, who participated in the Karabakh negotiations from 1997-2008, pointed out in May 2009 "nothing is agreed until everything is agreed."