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The OSCE mediators brokering settlement to the Armenia-Azerbaijan conflict issued an optimistic statement at a meeting with the leader of the self-proclaimed Upper (Nagorno) Garabagh republic on Wednesday.
French co-chair of the Minsk Group Bernard Fassier said after meeting Bako Saakian in Khankandi, the center of the self-styled entity, that 2008 will be crucial for the Garabagh settlement.
"There is goodwill between the conflicting sides, which gives a hope for a final decision on the conflict resolution this year," he said.
Russian co-chair Yuri Merzlyakov agreed with his counterpart but argued that the parties have not yet succeeded in reaching mutual understanding on basic principles of the peace process. The intermediaries have not been able to foster an option fully accepted by the sides either. Merzlyakov added, however, that the co-chairs continue working to accomplish that goal.
"The 2008 should indeed be a crucial year for the resolution of the Garabagh conflict," he said.
The Minsk Group co-chairs from France, Russia and the United States arrived in the Azerbaijani capital Sunday evening as part of a visit to the region that aims to inquire about the positions of the two countries' governments on the written proposals submitted by the MG in Madrid late in November. After holding discussions in Baku they headed to Yerevan late on Monday. The intermediaries met with President Robert Kocharian and Prime Minister Serzh Sarkisian. The co-chairs further arrived in Khankandi. On Friday, they are tentatively scheduled to return to Baku.
The separatist leader maintained that 2008 could see a turning point in the conflict settlement only if the self-proclaimed republic "joins the negotiating process as a full-fledged party".
"We also stressed that we are interested in Armenia's further participation in talks, as this could help to preserve current peace," Saakian said.
"The co-chairs laid out common views expressed by the leadership of Armenia and Azerbaijan, and based on that one can conclude that there are certain provisions that do not meet the interests of Upper Garabagh's people," he said.
Speaking of the benefit of talks, Saakian said "the situation will improve only when the problem finds a final solution". The separatist leader linked this with the "independence" of what he called "his country" that should be allegedly recognized by the world community.
US MG co-chairman Matthew Bryza expressed cautious optimism about the conflict settlement. "Based on the outcomes of meetings with the presidents I sense a positive shift in the negotiating process," he told an international conference in Armenia Tuesday. Bryza emphasized that the peace process is currently at an important stage as the two countries' leaders are thoroughly studying the new document on the conflict resolution.
"It is difficult to cite a specific timing for an agreement on basic principles, but the sides are demonstrating a new approach to the issue," he said.
Bryza noted that neither party to the conflict was trying to block the peace process or delay it. "Both sides are conducting a sincere exchange of views and informing each other as to what is required for reaching agreement.
"Presidents Ilham Aliyev and Robert Kocharian have their own views that are quite firm, but at the same time, they appear to be ready to strike a common ground," Bryza said.
The US co-chair said the timing for the next presidential meeting depended on the outcomes of the elections in both countries but the 2008 votes would not affect the peace process.
He stressed that all presidential hopefuls in both countries support the Minsk Group's mediating activity.
Presidents Aliyev and Kocharian last met on the sidelines of a CIS summit in St. Petersburg, Russia June 9.
The presidential ballot in Armenia is due in February 2008, while in Azerbaijan it will take place in October that year.
The conflict between the two South Caucasus republics reared up in the late 1980s due to Armenia's territorial claims. Armenia has been occupying over 20% of Azerbaijan's internationally-recognized territory since the early 1990s in defiance of international law. The ceasefire accord was signed in 1994, but peace talks have been fruitless so far and refugees remain stranded.

Baku awaits outcome
Azerbaijani Deputy Foreign Minister Araz Azimov said Tuesday that it was unclear whether or not the OSCE mediators who headed to Yerevan late on Monday after holding talks in Baku would return to the Azerbaijani capital after meeting with the Armenian leadership.
He said that if the MG co-chairs fail to bring clarity to Yerevan's stance on key principles of the conflict resolution, their return to Azerbaijan at the weekend for further discussions was under a question mark.
"We are awaiting the outcomes of their consultations in Yerevan. If no need or reason arises for their repeated visit, they will not return to Baku, and we will have to wait for their next visit," the deputy minister said.
Azimov noted that despite some progress in negotiations, the advances were not enough to bring about cardinal changes in the peace process.
"We don't want to hold dialog just for the sake of holding it. If the other side merely cherishes the thought of gaining time, we will not accept this," he added.