Armenia’s Foreign Intelligence Service has released its 2026 annual report, highlighting key developments in regional security. The report notes that the Washington Declaration, signed on August 8 with active mediation from U.S. President Donald Trump, along with the preliminary agreement on “Peace and the Establishment of Interstate Relations,” helped reduce the risk of military escalation and improved the chances for peaceful settlement.

However, the agency warns that a major risk factor remains Azerbaijan’s state-led promotion of the “Western Azerbaijan” narrative and the so-called “return of Western Azerbaijanis.” The report underscores that Baku has intensified this propaganda since the declaration, posing serious threats to regional stability, security, and long-term peace.

A key intelligence priority for 2026 will be evaluating Azerbaijan’s true intentions behind advancing this policy. The report raises two central questions:

• Is Azerbaijan attempting to reignite conflict on Armenian territory under a new ideological guise?
• Or is it using the narrative as a foreign policy tool to counter discussions on the return of Nagorno-Karabakh Armenians?

The report also warns about Azerbaijan’s continued increase in military spending. Notably, the growth rate in military allocations far exceeds that of other sectors, often appearing to come at the expense of non-defense budgets.

A comparative analysis shows that Azerbaijan’s military spending for 2026 is up by approximately 44% compared to 2023, while allocations for other sectors rose by just 7.4%. In fact, some non-military sectors have seen a decrease from 2025 to 2026, in contrast to ongoing increases in defense spending.