The Nagorno-Karabakh conflict, which mars relations between Armenia and Azerbaijan and impedes the political stability and economic development of the South Caucasus, has a long history and deep roots. Its main political cause lies in the contradiction between the aspirations for national self-determination of the predominantly Armenian-populated enclave and Azerbaijan's claim of territorial integrity to its Soviet-defined boundaries. Although the Bolsheviks granted sovereignty over the overwhelmingly Armenian-populated oblast of Nagorno-Karabakh to Azerbaijan in 1921, the people of Nagorno-Karabakh have since questioned this decision. In 1988, the Soviet of the Nagorno-Karabakh autonomous oblast requested secession from Azerbaijan, an event beginning the present phase of the Nagorno-Karabakh conflict. The response was the massacre of Armenians in the Azerbaijani industrial city of Sumgait. Rising ethnic tensions and the ensuing violence gradually degenerated into a full-scale war between Azerbaijan and the local Armenian self-defense forces in and around Nagorno-Karabakh and then, following the collapse of the Soviet Union at the end of 1991, the devastating military confrontation along the borders of newly independent Armenia and Azerbaijan.On May 12, 1994, a cease-fire agreement, brokered by Russia and signed by Armenia, Azerbaijan, and Nagorno-Karabakh1 put an end to the years of bitter armed fighting in the battle about the of Nagorno-Karabakh. Because of the conflict, 6,500 Armenians and 20,000-25,000 Azerbaijanis were killed; 412,000 Armenians were expelled from Azerbaijan; and 186,000 Azeris fled from Armenia.2 Nagorno-Karabakh forces established military control over most of Karabakh, as well as seven districts of Azerbaijan, from where some five hundred thousand Azeris were displaced. Since the cease-fire, various international mediation efforts between the conflicting parties have been consolidated into negotiations under the auspices of the Organization for security and Cooperation in Europe (OSCE), led by the so-called Minsk Group, cochaired since 1997 by France, Russia, and the United States. The negotiations, which so far have produced few results, have focused on two possible methods for the settlement of the conflict. One approach is the package deal and the other is a step-by-step (or phased) solution.The package solution requires an agreement on the final of Nagorno-Karabakh to open a road for the elimination of the armed conflict's consequences. On the other hand, the step-by-step approach postpones an agreement on the final of Nagorno-Karabakh to the indefinite future, focusing instead on a agreement addressing all other issues. These include provisions for reliable international security guarantees for Nagorno-Karabakh, the withdrawal of Nagorno-Karabakh forces from the occupied territories, the return of displaced persons to their prewar homes, and the normalization of the relations between Armenia and Azerbaijan, including the reopening of trade and communication links.The choice between a step-by-step and a package methodology for the conflict's settlement has become a bitter point of contention in Armenian political discourse. The administration of the first president, Levon Ter-Petrossian, favored the step-by-step approach as a way to avoid the irreconcilable contradictions of the conflicting parties' maximalist positions, promoting the land for peace formula. His opponents in the government, who forced him to resign over differences on the settlement, declared the policies defeatist.The current Armenian president, Robert Kocharian, has been a long-time advocate for the package solution based on the land for status formula. Besides, the former Karabakhi leader's rise to power in 1998 eventually brought a change to the negotiations' format. Whereas the 1994 Budapest Summit of the OSCE recognized Armenia, Azerbaijan, and Nagorno-Karabakh as parties to the conflict, the negotiators' perception of Kocharian as representing both Armenia and Nagorno-Karabakh eventually led to the replacement of the negotiations' trilateral format by bilateral Armenian-Azerbaijani talks. …