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Armenia and Azerbaijan held talks with the United States in Munich on Saturday, the first meeting between the leaders of the South Caucasus nations since October amid heightened tensions over the disputed Nagorno-Karabakh region.

Tensions have escalated over a two-month blockade of the Lachin corridor, the only land route giving Armenia direct access to Nagorno-Karabakh.

Armenia said the progress of work on a draft peace treaty was discussed during Saturday's talks between Armenian Prime Minister Nikol Pashinyan, Azerbaijan's President Ilham Aliyev and US Secretary of State Antony Blinken, which took place during the three-day Munich Security Conference.

"Prime Minister Pashinyan reaffirmed the determination of the Armenian side to reach the signing of such an agreement that will truly guarantee long-term peace and stability in the region," said a statement on the prime minister's website.

It said there had also been discussion about the unblocking of regional transport infrastructures and the implementation of delimitation between the two countries.

"I think Azerbaijan and Armenia need to demonstrate that the transition from long-lasting standoff, mutual hatred and hostility must end," Aliyev said on a panel discussion.

"I think [the peace agreement] could be a good example of how countries which had serious, historical disagreements can get together and turn the page of hostility."

Russian news agencies reported that Aliyev said Baku had proposed creating checkpoints on the border with Armenia.

Nagorno-Karabakh is internationally recognised as part of Azerbaijan, but its 120,000 inhabitants are predominantly ethnic Armenians and it broke away from Baku in a first war in the early 1990s.

Azeri civilians identifying themselves as environmental activists have been facing off since 12 December with Russian peacekeepers on the Lachin corridor.

Yerevan says the protesters are government-backed agitators. Baku denies blockading the road, saying that some convoys and aid are allowed through.

Saturday's meeting was the two leaders' first face-to-face encounter since late October, when Russian President Vladimir Putin hosted talks in the Black Sea city of Sochi. A 7 December meeting in Brussels was scrapped.

(Reuters)