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* Clashes between Azerbaijan and Armenia raise fears of

conflict

* Released solder given hero’s welcome

* Pardon prompts concern from United States and Russia

By Gleb Bryanski

MOSCOW, Sept 3 (Reuters) – International mediators from the

Organisation for Security and Co-operation in Europe said on

Monday that Azerbaijan’s decision to pardon an Azeri soldier who

killed an Armenian officer had damaged the peace process in the

region.

Armenia and Azerbaijan have been at odds since the war

between ethnic Azeris and Armenians that erupted in 1991 over

the mainly Armenian Nagorno-Karabakh enclave. A ceasefire was

signed in 1994 but new cross-border clashes this year have

prompted worries of a resumption of fighting.

Azerbaijan’s president, Ilham Aliyev, last week pardoned

Ramil Safarov, who had been sentenced to life in prison in

Hungary for the 2004 killing of Armenian officer Gurgen

Markaryan during NATO training but was sent back to Azerbaijan.

Armenia suspended diplomatic relations with Hungary, calling

Hungary’s decision to send back Safarov “a grave mistake”.

Safarov was given a hero’s welcome in Azerbaijan, where

thousands of people took to the streets to greet him in his

native city of Sumgait. The government promoted Safarov to the

rank of major and paid his salary for eight years.

The OSCE Minsk group, which includes representatives of the

United States, Russia and France and is mediating between

Armenia and Azerbaijan, met the two countries’ foreign ministers

after the pardon threatened to inflame tensions.

“They (Minsk Group representatives) expressed their deep

concern and regret for the damage the pardon and any attempts to

glorify the crime have done to the peace process and trust

between the sides,” the group said in a statement.

Azerbaijan said its president acted in line with the law and

dismissed criticism from the Europe, Russia and United States –

as well as Armenia’s reaction.

“The hysterical approach of the Armenian leadership was

targeted at the local population and was meant to be a populist

political show,” Azerbaijan’s Foreign Ministry spokesman Elman

Abdullayev said.

The White House said on Friday President Barack Omama was

“deeply concerned” by the pardon, saying in a statement: “This

action is contrary to ongoing efforts to reduce regional

tensions and promote reconciliation.”

U.S. Secretary of State Hillary Clinton said during a visit

to Armenia in June that violence between Armenia and Azerbaijan

could lead to a broader regional conflict.

Armenia’s regional ally Russia expressed concern on Monday

over “possible negative consequences” of the decisions made by

Azeri and Hungarian authorities, as well as impact they may have

on stability in the region.

“When it comes to the U.S. position, we still do not

understand the third countries’ interference … I do not think

that the U.S. position is understandable,” Abdullayev said,

reiterating that the handover and pardon were within the law.

Hungary, as well as other Western countries, has been

developing economic ties with energy-rich Azerbaijan, which is

host to oil majors including BP, Chevron and

ExxonMobil.