Azerbaijan, Armenia hold talks over disputed Nagorno-Karabakh

The conflict between ethnic Azeris and Armenians erupted in 1991 over the area, a mountainous enclave within Azerbaijan but with a majority Armenian population, which Armenian-backed forces seized along with seven surrounding Azeri districts.

A truce was signed in 1994, but there was no peace treaty. Violence still flares sporadically along the ceasefire line and Azerbaijan's border with Armenia - underlining the risk of a conflict in the South Caucasus, where Turkey, Russia and Iran have interests.

The enclave of about 160,000 people has run its own affairs with heavy Armenian military and financial backing since the war. Oil-producing Azerbaijan often threatens to take it back by force, though it says it favours diplomacy.

The one-day talks held in the French capital between Azerbaijani Foreign Minister Elmar Mammadyarov and his Armenian counterpart Edward Nalbandian was a new effort to advance the peace process, said a statement from Russia, France and the United States.

The three countries, known as the Minsk Group, have led years of mediation under the auspices of the Organisation for Security and Co-operation in Europe.

"The foreign ministers reiterated their support for a peaceful settlement and their determination to continue negotiations ... (They) agreed to a further discussion of the peace process in the coming weeks," the Minsk Group said.

An Azerbaijani diplomatic source in Paris said he did not think talks were moving closer to a resolution, although his country remained committed to negotiations.

"We are trying to find a solution to this impasse with a large autonomy for the Armenians, but it (Nagorno-Karabakh) has to stay in Azerbaijan territory," the source said. "We don't want war even if we are ready for it."

There have been several rounds of talks between the neighbours since 1994, and the foreign ministers of both countries met in Paris last October.

In the same month, Armenian President Serzh Sarksyan accused Azerbaijan of accumulating a "horrendous quantity" of arms in preparation for a resumption of fighting, but said he wanted a negotiated settlement to the conflict.

Last August, Azeri President Ilham Aliyev pardoned and freed a soldier convicted of killing an Armenian soldier with an axe in Budapest, drawing furious protests from Armenia.

Sarksyan said the pardon showed Nagorno-Karabakh could not be part of Azerbaijan.

Armenia has a security agreement with Russia, while Azerbaijan has one with Turkey.

(Reporting By John Irish; Editing by Pravin Char)