Before the truce, several years of fighting had left some 30,000 people dead and forced more than one million from their homes.

In 2006, an overwhelming majority of Nagorno-Karabakh residents - mostly ethnic Armenians - voted in favour of declaring a sovereign state. The declaration has not been internationally recognised.

'Political settlement'

At Sunday's talks hosted at Meiendorf Castle, the presidents of Azerbaijan and Armenia agreed "to speed up further moves in the negotiating process" over Nagorno-Karabakh, Russian President Dmitry Medvedev said in a statement.

"They will facilitate the improvement of the situation in the South Caucasus and establishment of stability and security in the region through a political settlement of the conflict based on the principles and norms of international law and the decisions and documents adopted in this framework," he said.

The two country's foreign ministers would work with Russia, the US and France, co-chairmen of the Minsk Group of the Organisation for Security and Co-operation in Europe (OSCE), which is seeking a diplomatic solution to the conflict, he added.

Mr Sarkisian and Mr Aliyev made no comment.

Hopes of a peace deal between Azerbaijan and Armenia were first raised in 2001, after a series of meetings between Armenia's former President, Robert Kocharyan, and Heydar Aliyev, the late Azeri leader. However, the talks and subsequent occasional meetings have come to nothing.

In March, the OSCE said it was sending a mission to Nagorno-Karabakh following serious clashes which reportedly left several soldiers dead on both sides.

Correspondents say Russia's brief war with Georgia in August has given impetus to international efforts to resolve disputes in the Caucasus, a region where Moscow is seeking greater influence.

Story from BBC NEWS

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Armenia and Azerbaijan agree to talks on disputed land Caucasus adversaries Armenia and Azerbaijan have signed an agreement to try to resolve their dispute over Nagorno-Karabakh. At talks in Moscow on Sunday both sides agreed to seek a peaceful solution to the row over the breakaway region. Russian President Dmitry Medvedev arranged the talks during a visit to Armenia in October.

He said the aim was to “work towards stabilization of the situation in the South Caucasus and the establishment of stability and security in the region on the base of principles of international law and relevant decisions and documents.

The President added that stabilization would create “favourable conditions for economic development and cooperation in the region. A Peaceful settlement should be accompanied by legally binding international guarantees of all its aspects and stages," Medvedev said.

Nagorno-Karabakh was part of the Soviet Republic of Azerbaijan in the USSR, mostly populated by Armenians.

In 1991 the region unilaterally declared independence, sparking a war between Armenia and Azerbaijan that killed around 30,000 people and created a million refugees. 

Since the ceasefire in 1994, most of Nagorno-Karabakh remains under joint Armenian and Nagorno-Karabakh military control.

Armenia remains committed to the region’s independence, while Azerbaijan says its territorial integrity must be respected.

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