December 2, 1997

Preamble

The Parties, determined to bring about a peaceful resolution to the long-standing Nagorno-Karabakh conflict, transforming the existing cease-fire into a lasting peace; recognizing the benefits of peace and cooperation in the region to the prosperity and well-being of their peoples; desiring to establish the basis for cooperative economic development of the Caucasus, allowing the people of the region to live normal, productive lives under democratic institutions, with a rising standard of living and a promising future; understanding that cooperation under this Agreement will lead to normal trade, transportation and communications links throughout the region, allow people to reconstruct their home towns and villages with the assistance of international institutions, produce the stability necessary for a major increase in external investment in the region, and open the way for mutually beneficial trade leading to the realization, for all of the people, of the natural prosperity inherent in the Caucasus region, and that reconciliation and interaction among the peoples will unleash their enormous potential for the good of their neighbors and for the people of the world; committed to the provisions of the UN Charter, to the basic principles and decisions of the OSCE and the universally accepted norms of international law, and to the full implementation of Resolutions 822, 853, 874 and 884 of the UN Security Council; recalling the pledge of the participating States of the OSCE, at their 1994 Summit in Budapest, to redouble the efforts and assistance of the OSCE towards a peaceful settlement of the conflict; their direction to the Co-Chairmen of the Minsk Conference to conduct speedy negotiations; #nd the* declaration of their political will to provide, with an appropriate resolution from the UN Security Council, a multinational OSCE peacekeeping force following an agreement among the parties for cessation of the armed conflict; and determined to continue the peace process in good faith to reach without delay a comprehensive settlement which shall resolve the final status of Nagorno-Karabakh; commit themselves to the actions outlined below.

I. The Parties shall refrain from the threat or use of force to settle disputes among them. They shall settle all such disputes, including any that may arise in connection with the implementation of the present Agreement, by peaceful means.

II. The Parties shall withdraw their armed forces in accordance with the following provisions and as set forth in detail in Annex 1:

A. In the First Stage, forces along the current line of contact to the east and south of Nagorno-Karabakh shall withdraw to lines delineated in Annex 1, and in accordance with the schedule therein, with due consideration for the recommendations of the High Level Planning Group (“HLPG”), to allow initial deployment of the vanguard of an OSCE multinational force in a militarily sound transitional buffer zone, to separate the Parties along that line and to provide security during the second stage of withdrawals.

B. In the Second Stage, forces shall withdraw in accordance with the schedule set forth in Annex 1 as follows:

(1) Any forces of Armenia located outside the frontiers of the Republic of Armenia shall withdraw behind those frontiers.

(2) The forces of Nagorno-Karabakh shall withdraw behind the 1988 boundaries of the Nagorno-Karabakh Autonomous Oblast (“NKAO”) with the exception of the Lachin District.

(3) The forces of Azerbaijan shall withdraw behind lines, delineated in Annex 1 on the basis of the recommendations of the HLPG and outside any territory of Armenia.

(4) Heavy armaments shall be withdrawn to positions specified in Annex 1 on the basis of the recommendations of the HLPG, to be monitored by the OSCE peacekeeping force, with requirements for transparency and reporting as set forth in that Annex.

III. The territory subject to these withdrawals shall constitute a Buffer Zone and a Zone of Separation, the details of which are set forth in Annex 2.

A. Upon completion of the withdrawal of forces, the Buffer Zone shall be located around the 1988 boundaries of the NKAO, the northern and southern boundaries of the Lachin District. The Buffer Zone shall be unpopulated and completely demilitarized except for the presence of elements of the OSCE Peace Keeping Operation.

B. The Zone of Separation shall be demilitarized with the exception of forces permitted to operate in cooperation with the Permanent Mixed Commission as set forth in detail in Annex 2, to include:

(1) elements of the OSCE Peace Keeping Operation;

(2) formations for border patrolling and demining;

(3) civilian police whose numbers and permitted weaponry are delimited by Annex 2.

C. A no-fly zone shall be established in the Buffer Zone and Zone of Separation, in which the Parties shall exclude military flights with monitoring by the OSCE peacekeeping force, as set forth in Annex 2.

D. After withdrawal of forces in accordance with Article II, security in all the regions, which remain under the control of Nagorno-Karabakh shall be maintained by relevant security forces of Nagorno-Karabakh.

IV. Pursuant to OSCE’s decisions at the 1994 Budapest Summit, and with the assistance and cooperation of the Parties, an OSCE multinational peacekeeping force (“PKF”), in cooperation with the Permanent Mixed Commission and the Armenian-Azerbaijani Binational Commission, shall monitor the withdrawal of forces and heavy weapons, the exclusion of military flights, the maintenance of the demilitarization regime and the situation along the Armenian-Azerbaijani frontier as set forth in Annex 2. The Parties call on the UN Security Council to adopt an appropriate Resolution for an initial period of no more than one year, renewable as necessary upon recommendation of the OSCE Chairman-in-Office. The Parties agree that overall duration of the PKO shall be kept to the minimum period necessary in light of the situation in the region and the pace of the comprehensive settlement of the conflict. The Parties shall cooperate fully with the PKF to ensure the implementation of this Agreement, and to prevent any breach in or interruption of the peacekeeping operation.

V. The Parties shall facilitate the safe and voluntary return of displaced persons to their former places of residence within the Zone of Separation, as set forth in Annex 2. The PKF in cooperation with the Permanent Mixed Commission will monitor the security of the returning populations and promote confidence on all sides in the observance of the demilitarization regime in this zone. The Parties shall conduct negotiation to achieve the earliest safe and voluntary return of all other persons, not covered by this Agreement or the comprehensive settlement, who were displaced by the conflict and by tensions between Armenia and Azerbaijan since 1987.

VI. Simultaneously with the withdrawal of forces, the Parties shall undertake immediate measures to open roads, railroads, power, communications, trade and other links, including all work necessary to accomplish this in the shortest possible period, according to the schedule and detailed provisions set forth in Annex 3. The Parties shall guarantee use of these links to all, including ethnic minorities, guaranteeing the latter access to their co-ethnics elsewhere in the region. Each Party commits itself to lift all blockades and ensure delivery of goods and people to the other Parties without hindrance. The Parties shall guarantee free and safe rail communication to one another.

VII. The Parties shall cooperate fully with the ICRC, UNHCR and other international entities to ensure the prompt and safe return of all persons detained in connection with the conflict, the investigation of the fate of those missing in action, repatriation of all remains and the delivery without discrimination of humanitarian and reconstruction aid through territories under their control to the regions that have suffered during the conflict. The Parties shall cooperate with the OSCE PKF through the Permanent Mixed Commission to establish confidence-building measures.

VIII. The Parties shall immediately establish a Permanent Mixed Commission (“PMC”) to supervise the implementation of the provisions of this Agreement with regard to issues affecting Azerbaijan and Nagorno-Karabakh. The Chairman of the PMC shall be a representative designated by the OSCE Chairman-in-Office. The Vice Chairmen of the PMC shall be representatives of Azerbaijan and Nagorno-Karabakh. The primary responsibility of the PMC shall be to supervise implementation of the Agreement. The responsibilities of the OSCE Chairman shall also include mediation of cases of disagreement and authorization of responses to emergencies such as natural disasters. The PMC shall have Military, Economic, Humanitarian and Cultural, and Liaison Subcommissions. The structure, duties and other details concerning the PMC are set forth in Annex 4.

IX. The Parties shall immediately establish an Armenian- Azerbaijani Binational Commission (“AABC”) to assist in the prevention of border incidents between Armenia and Azerbaijan, conduct liaison between border troops and other relevant security forces of both countries and observe and facilitate the arrangements for opening roads, railroads, trade, communications, pipelines and other links. The AABC shall have two Co-chairs, one from Armenia and one from Azerbaijan. The Commission shall include a representative designated by the OSCE Chairman-in-Office. The structure, duties and other details concerning the AABC are set forth in Annex 5.

X. The Azerbaijan Republic and the Republic of Armenia shall promptly establish full diplomatic relations with permanent diplomatic missions headed by ambassadors. The Azerbaijan Republic and the Republic of Armenia shall engage in negotiations, bilaterally and, multilaterally in appropriate international and regional fora, to ensure larger security of the region, including military transparency and full compliance with the CFE/Treaty.

XI. Having brought to the end the military aspect of the conflict, the three Parties to the current agreement shall continue to negotiate in good faith (in cooperation with the Co-chairs of the Minsk conference and other appropriate parties invited by the OSCE Chairman-in-Office) to achieve without delay a comprehensive settlement which shall include resolution of the status of Nagorno-Karabakh and of the issues of Lachin district, Shusha and Shaumyan district; after such a settlement is achieved during the negotiations and signed by the three above Parties, it is subject to recognition by the international community at the Minsk Conference convened at the earliest possible date.

XII. Each Party shall fully respect the security of the other Parties and their populations; undertake to promote good-neighborly relations among their peoples, facilitating trade and normal interaction among them; and refrain from statements or actions that could undermine this Agreement or good relations.

XIII. In addition to the specific provisions concerning peacekeeping and monitoring of withdrawals set forth above, and recalling the relevant principles and commitments of the OSCE, including those reflected in the Helsinki Document of 1992 and the Budapest Document of 1994, the OSCE, through appropriate mechanisms, shall monitor the full implementation of all aspects of the present Agreement and take appropriate steps, in accordance with those principles and decisions, to prevent and respond to violations of the terms of this Agreement. The witnesses of the present Agreement acting through the OSCE Permanent Council and the UN Security Council, facilitate its full implementation. In case of a serious violation of the present Agreement they consult each other about the necessary steps to be taken, inform immediately the OSCE Chairman-in-Office, the Chairman of the UN Security Council and the UN Secretary General and ask the OSCE Permanent Council or the UN Security Council to consider appropriate actions.

XIV. The Parties assume mutual obligations to ensure compliance with the provisions of this Agreement including guarantees for the security of Nagorno-Karabakh, its whole population, and the returning displaced persons, to undertake necessary measures for implementation of all commitments resulting from the present Agreement.

XVI. This Agreement shall enter into force upon signature and ratification and shall remain in force except as provided in the comprehensive settlement referred to in Paragraph XI. The present Agreement can be modified, supplemented and stopped with the consent of all the Parties.