There is a possibility of resumption of hostilities between Armenia and Azerbaijan, said Sabine Freizer, the International Crisis Group Director of the Europe Program.

The oil incomes inspired confidence in Azerbaijan and offered a chance to modernize the army, according to her.

"Azerbaijan seems to drag out a peaceful resolution unless the military balance is in its favor. Official Yerevan, which has achieved real economic progress, is also inflexible and keeps on building up defense expenses," she said.

"Armenian leaders also think that time works for them and de facto independence of Nagorno Karabakh will become a reality that can't be neglected. However, the wait-and-see policy represents a menace. The year of 2012, when Azerbaijan's oil income can reduce and the military adventure can seem a tempting way to distract popular attention from the economic crisis, promises to become the most dangerous year. Vital oil and gas pipeline stretching nearby Karabakh will be the first victims of the new war. This is a scenario Europe and the United States want to prevent," Ms. Freizer underscored.

"The Azeri leadership should stop convincing the public in the possibility to win the war with a Blitzkrieg," she said, Day.az reports.