While the eyes of the world were focused on the spiralling conflicts in the Middle East and Ukraine in 2025, progress was being made towards tentative peace elsewhere—between Armenia and Azerbaijan. The Armenia-Azerbaijan peace agreement, mediated by President Trump in August 2025, has the potential to transform one of the most intractable conflicts on the territory of the former Soviet Union, and to unlock trade and transport routes from Asia to Europe that bypass both Russia and Iran. However, a combination of constitutional challenges and geopolitical interference could stand in the way of this breakthrough leading to a lasting peace. If the West wants to claim a rare diplomatic victory in the Caucasus, sustained engagement will be required in 2026.
A Fragile Peace
Beyond the initial fanfare which greeted the joint declaration agreed in Washington, much remains uncertain and diplomatic follow through seems to have slowed. The agreement provides for the establishment of diplomatic relations and delineation of borders, and, critically, for the building of a transport route connecting Azerbaijan to its exclave of Nakhichevan, a route now dubbed the Trump Route for International Peace and Prosperity. However, progress is on hold since neither country has yet signed it.
Baku will not sign the agreement until Armenia removes what it says are claims to Azerbaijani territory from the text of its constitution. Armenia, for its part, is preparing constitutional changes, but these will have to be ratified in a referendum that is slated for 2027. Given that Armenian Prime Minister Nikol Pashinyan could face an uphill battle to be re-elected in a parliamentary poll in 2026, this leaves constitutional amendments up in the air, as well as the future of the peace agreement.
Not only is the peace deal itself fragile, but the geopolitical context in which it was signed has changed markedly since President Trump brought Pashinyan and Azerbaijani President Ilham Aliev together in Washington in August. At that time, Russian-Azerbaijani relations had been at a historic low point for over six months. However, a rapprochement between Moscow and Baku in October 2025, and renewed Russian interference in Armenia, could undermine American and Western influence and derail the process.
Russia Rebuilding Influence in Baku and Yerevan
The weakening of Russia’s influence in both Baku and Yerevan opened the possibility for a Western-led peace mediation effort. Moscow’s military failures and diplomatic isolation in the wake of its full-scale invasion of Ukraine gave Azerbaijan a free hand in its disputed Karabakh region. In 2023, Russian peacekeepers, deployed in the region to protect its 100,000 strong ethnic Armenian population in the wake of the 2020 Second Karabakh War, did nothing as Azerbaijani troops stormed in, forcing out the population in what the European Parliament has called ethnic cleansing. This had the dual effect of diminishing Russian prestige in Azerbaijan and destroying Russia’s reputation in Armenia: in 2021, 37 percent of Armenians said Russia was the main friend of the country, in 2024 that figure had declined to 12 percent. Russia-Azerbaijan relations were further weakened that year by the shooting down of an Azerbaijani passenger jet by Russian air defence. At the time, Putin appeared to try to shift the blame for the incident to Ukrainian drones, which was greeted with anger in Baku. This was followed in July by the violent arrests of Azerbaijani citizens in Yekaterinburg that left two dead.
However, Russia is now seeking to rebuild its position in both countries. In Azerbaijan, Putin’s recent, more fulsome apologies over the downed passenger jet seem to have done the trick of putting the relationship back on a “business-as-usual” footing, albeit one that now resembles an equal partnership rather than one in which Baku was subordinate, a situation which prevailed prior to 2023. It is in Azerbaijan’s interest to pursue two track diplomacy—one in an east-west direction with its ally Turkey, and another in a north-south with Moscow. Indeed, sometimes these two directions fortuitously pull together, as in the case of increased Azerbaijani gas exports to Europe, exports which some experts believe have their origin in Russia.
In Armenia, meanwhile, Russia is lending its support to opponents of Pashinyan, some of whom have called for a union state between Armenia and Russia “on the Belarus model.” Samvel Karapetyan, a dual Russian-Armenian billionaire who was arrested in June over calls to overthrow the government, is also seen by some as a potential pro-Russian candidate at the parliamentary elections this year.
Notably, while Russia aims to both rebuild a mutually beneficial relationship with Baku, and undermine Pashinyan’s pro-Western government in Yerevan, it also wants to reassert its role as regional arbiter. The peace agreement mediated by President Trump directly undermines this role, meaning that Moscow is now more likely to seek opportunities to play spoiler.
Western Engagement Underwrites Stability
Given this volatile diplomatic landscape, it is vital that Western policymakers increase engagement with Armenia and Azerbaijan if the potential benefits of President Trump’s peace agreement are to be realized. The main obstacle to signing is Baku’s demand that Armenia change its constitution, which cannot happen without a referendum and there is no guarantee that Armenian voters will back a new charter.
The referendum was expected at the same time as parliamentary polls this year, but Pashinyan has postponed it until next year. He hopes to separate what is likely to be a polarizing election from the non-partisan issue of constitutional changes, and to buy time to build up support. However, Pashinyan’s poll ratings are low and his success in the election or the referendum cannot be guaranteed. The delay may also prompt Baku to adopt a more bellicose stance. Following the August meeting in D.C., it was reported that Baku would be winding down its “Western Azerbaijan” irridentist project which made territorial claims on much of Armenia, but by September, it was made known that the “Western Azerbaijan Community” would continue to enjoy the government’s blessing. Such rhetoric from Baku could heighten the risk that Armenian voters will reject the referendum. Thus, at present the peace agreement exists in diplomatic limbo: agreed but not signed, a roadmap for the future but also a bone of contention in the present.
Given these circumstances, the West could attempt to help the parties come up with a Plan B, such as signing the agreement without ratifying it. In any event, the West must make it clear to Azerbaijan that any further military pressure on Armenia would be unacceptable.
The West could also help Yerevan and Baku promote the peace agreement to domestic audiences. Here, there is greater opportunity to engage with Armenia, and to entrench the democratic progress and westward turn that have been achieved in the last few years. Investment in the country’s independent media and civil society would help them respond to Russian influence operations and other hybrid tactics, which are all but certain to intensify as parliamentary elections approach, with a likely focus on Pashinyan’s supposed capitulation to Baku.
In the longer term, the West should support the Armenian government to make the case for a pro-Western Armenia at peace with its neighbors. The recent USAID shutdown ended programs designed to help Armenian media achieve financial sustainability and stopped funding to increase the strategic communications capacity of the Armenian government. If the West is serious about fostering a peaceful South Caucasus free from Russian interference, the time to increase support is now.
– William Dunbar is a RAND Europe associate. Published courtesy of RAND.
