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The negotiators were patient but frustrated. Finally Russia managed to negotiate a ceasefire (February 1994) which was officially signed on May 12, 1994, and which is still in power (2005). After a time of stalemate, the governments in Azerbaijan and Armenia began to meet on regular basis in order to find a solution to the problem, even though Armenia had officially never been directly involved in the conflict. But Azerbaijan refused to negotiate with the representatives of the Republic of Karabakh, since such a move, at least partially, would indirectly be considered as a recognition of the legitimacy of the Armenian administration.

But with the news about the discoveries of new oil deposits in the Caspian Sea and the enormous financial possibilities, the position of the surrounding world changed. The Clinton administration, during the summer of 1994, suddenly started to show an increased engagement in the conflict and began actively drive a rapprochement between the involved parties. Russia suggested that Russian peace keeping forces should be deployed in the region, led by CSCE or UN. USA supported the plan and Turkey agreed that no Turkish troops would be sent, but suggested Erzurum as logistic base for this force. At this point of time the Karabakh conflict, which had started some time ago as a local conflict in the southern Soviet Union, had turned into a piece in the high political game on international level, a game which was about million barrels of Caspian oil.

In 1995, the negotiators suggested the following grounds for a negotiation: Karabakh would formally remain within Azerbaijan, but have its own police, military and security forces. Its complete autonomy would not include the right to establish diplomatic relations, but would be guarantied by international peace keeping forces, which would be stationed in the Latchin corridor, with formal security guaranties from NATO and USA. The attitude of the Armenians towards this autonomy was described in an anecdote which circulated at that time. It told that some Armenians had been taken to Åland, an autonomous island ruled by its Swedish population but which is formally within the political borders of Finland. When they were asked whether such an autonomy would be sufficient for them, the Armenians surprised their hosts by answering favourably. "Are you sure that you would accept such an autonomy?" repeated the surprised hosts. "Oh, yes" answered the Armenians, "but only within the political borders of Finland!" 1

The time had seldom been on the side of the Armenians during the Karabakh conflict, and the situation was shifting more and more to the favour of Azerbaijan during the four and the half years after the signing of the ceasefire treaty in 1994. The Armenians occupied 13 percent of Azerbaijan's territory and the conflict had caused hundred thousands of refugees within Azerbaijan (It should be mentioned that the figures used by the Azeri side in their propaganda were far from the truth and have stated that 20% of Azerbaijan is occupied and more than one million people are refugees. But once one considers the fact that the total area of Azerbaijan is 86,600km2, while Karabakh's area is 4,400km2 and the total area of the occupied territories is 7,059km2, it is clear that the total area, including Karabakh, is just above 13% of Azerbaijan's total area and not 20%. Moreover, figures presented by the Red Cross and European monitoring organisations states that there are, at most, couple of hundred thousand refugees, which is far less from the million people which the Azeri side claims). The corruption and the economical polarisation in Armenia overshadowed the ongoing transfer to the market economy. The government had banned a large dominant political party and carried out large scale fiddling during the autumn elections. And finally, the Armenians in Armenia and Karabakh had become more and more suspicious towards the western world's real interests in the solution of the conflict, which pushed them more and more towards their traditional alley, Russia.