Armenia hopeful of imminent deal with Turkey

Armenia said on Thursday it was close to establishing diplomatic relations with neighbouring Turkey after a century of hostility.

High-level negotiations between the two countries began last year and expectations are rising of a deal that could include Turkey opening its border with Armenia. Turkey hopes a deal on Armenia will improve its chances of joining the European Union.

"The negotiations are ongoing and progress has been registered," Edward Nalbandian, the Armenian foreign minister, told reporters during a Black Sea economic conference attended by his Turkish counterpart, Ali Babacan.

"We think we can really get close and resolve this question in the near future."

Turkey closed its border with Armenia in 1993 in support of its traditional Muslim ally Azerbaijan, which was fighting Armenian-backed separatists in the breakaway mountain region of Nagorno-Karabakh.

Turkey and Armenia trace their own dispute to the First World War killing of thousands of Armenians by Ottoman Turks, which Armenia says was genocide.

Azerbaijan, a supplier of oil and gas to Europe, fears that it will lose its leverage on Nagorno-Karabakh, where a fragile ceasefire holds but a peace accord has never been signed, and says the border should not be reopened without concessions from Armenia.

Western diplomats are concerned that Azerbaijan might turn its back on European hopes that it will export some of its gas through Turkey, and instead send most of its gas through Russia.

Azeri President Ilham Aliyev was in Moscow on Thursday, three weeks after Azeri state energy firm Socar signed a memorandum with Russian gas export monopoly Gazprom about starting talks on Russia buying Azeri gas for export to Europe from 2010.

Looking to settle Azeri nerves, Turkish Prime Minister Tayyip Erdogan said this month that the deadlock over Nagorno-Karabakh should be resolved before any deal was struck between Turkey and Armenia.

Both the EU and U.S. President Barack Obama, during a visit to Turkey last week, have urged Turkey to normalise ties with Armenia.