/Reuters.com/ CHISINAU (Reuters) - The leaders of Azerbaijan and Armenia hold talks in Moldova on Thursday that may bring progress in a years-long dispute over Nagorno-Karabakh and ease the way for restoring normal ties between Armenia and Turkey.

Christian Armenia and Muslim Turkey are scheduled to sign an accord in Zurich on Saturday regularizing relations and ending a century of hostility.

Such an agreement would bolster Turkey's credentials as a modernizer in the West, boost the poverty-stricken economy of landlocked Armenia and improve security in the South Caucasus, a key transit corridor for oil and gas supplies to the West.

But analysts say much hinges on the outcome of Thursday's encounter in the Moldovan capital of Chisinau between Azeri President Ilham Aliyev and Armenia's Serzh Sarksyan on the emotive issue of the Nagorno-Karabakh enclave.

Chances are slim that NATO member Turkey, an ally of fellow Muslim Azerbaijan, will open the border with Armenia by year-end unless there is real progress on the issue, analysts say.

Violence erupted in the mountainous territory, an ethnic Armenian enclave located within Azerbaijan's internationally recognized borders, when the Soviet Union collapsed in 1991 and Nagorno-Karabakh declared independence.

Ethnic Armenian forces, backed by Armenia, drove out Azeri forces and took control of seven districts of Azerbaijan adjacent to Nagorno-Karabakh. Some 30,000 people were killed in the war.

The pace has quickened this year in internationally sponsored efforts to reach a peace deal, but each side faces difficulty in selling a deal at home.

Neither Aliyev nor Sarksyan will want to risk losing face by appearing to have made concessions on what is a highly emotive issue.

Sarksyan also has to contend with pressure from a vocal and powerful Armenian diaspora alert to any sign of weakness.

DOUBTS EXPRESSED

In Ankara, some doubts were expressed in diplomatic circles that the Zurich ceremony would take place because of the pressure on Sarksyan as well as opposition within Armenia and to a certain extent Turkey.

Relations between Turkey and Armenia are bedeviled by World War One mass killings of Armenians by Ottoman Turks. The two powers do not have diplomatic ties.

The United States -- with Russia and France part of the so-called Minsk group leading negotiations on the Karabakh dispute -- will host Thursday's talks at the residence of the U.S. ambassador to Moldova, a U.S. embassy spokesman said.

The meeting will take place at the margins of a summit of leaders of the Russia-led Commonwealth of Independent States (CIS) of which Armenia and Azerbaijan are members.
Most analysts cautioned against expectations of a breakthrough.

Turkey closed its border with Armenia in 1993 in solidarity with Azerbaijan, then at war with ethnic Armenians in Nagorno-Karabakh. It says ties with Armenia can not be normalized until there is progress in the dispute.

Armenia insists the two issues are separate, but Azerbaijan is insistent that they are linked.

(Additional reporting by Zerin Elci and Paul de Bendern in Ankara and by Hasmik Mkrtchyan in Yerevan and Afet Mehtiyeva in Baku)

 

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