Armenia-Azerbaijan Peace Deal: Progress, Obstacles, and What Comes Next

On August 8, 2025, Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev initialed a peace agreement at the White House, with U.S. President Donald Trump present, according to RAND Corporation. The agreement, formally titled the 'Agreement on the Establishment of Peace and Interstate Relations,' aims to end a conflict rooted in the late Soviet period, as described by Wikipedia.

The published text affirms mutual recognition of sovereignty and territorial integrity, establishes former Soviet administrative borders as international borders, renounces territorial claims, and bars the use or threat of force, according to CACI Analyst. As of early 2026, however, full signature and operational implementation still depend on how both sides sequence domestic legal steps, border-related work, and interim security arrangements, CACI Analyst notes.

Aliyev stated in July 2026 that 'for Azerbaijan and Armenia, peace is not just something written on paper - it is a reality,' pointing to increased supplies of Azerbaijani oil products to Armenia as a tangible sign of normalization, per Reuters.

A central unresolved issue concerns Armenia's constitution. Baku treats language in the preamble as an implicit territorial claim over Karabakh, while Yerevan rejects that interpretation and points to the possibility of a future constitutional referendum without committing to a timeline, according to CACI Analyst.

Aliyev has publicly stated that Azerbaijan wants Armenia to change its constitution, framing this as a condition for what he calls genuine peace, as reported by Reuters. This demand remains a source of political sensitivity in Yerevan, where any referendum would require broad domestic consensus.

Despite this friction, Armenian voters in mid-2026 elections signaled support for the peace-oriented course, with Pashinyan's victory interpreted as a rejection of nationalist alternatives and a sign that Russia's influence in the country is waning, according to Al Jazeera.

Border demarcation began in April 2024, when Armenia and Azerbaijan installed the first border markers based on Soviet-era maps, according to Caspian News. The delimitation commissions, created in 2022, have since met on both sides of the border in a historic first, as reported by OC Media.

Armenian authorities have noted that tensions have decreased in areas where demarcation is complete, though doubts remain in others, according to Deutsche Welle. The village of Kirants illustrates the human cost of the process: a border wall now physically divides the community, a concrete reminder that line-drawing on maps has direct consequences for residents.

The two sides have agreed to continue delimitation from north to south, according to reporting cited by Reddit's Armenia community, though the pace and sequencing of remaining sections remain subjects of negotiation.

Azerbaijan's September 2023 offensive ended the decades-long Nagorno-Karabakh conflict, forcing the enclave's dissolution and the flight of over 100,000 ethnic Armenians, as documented by the Council on Foreign Relations. Armenia's struggle to integrate these refugees risks undermining domestic stability, according to International Crisis Group.

Economic indicators offer some cautious optimism. Armenia's growth, which reached 12 percent in 2022 partly driven by Russian capital inflows, is expected to settle at around 4.9 percent in 2026, with early signs of peace-related economic benefits beginning to emerge, according to New Eastern Europe. Analysts caution that these dividends need to continue and deepen if the peace process is to retain public support in Armenia.