Mr. Chairman,

The Delegation of the Republic of Azerbaijan warmly welcomes the distinguished Co-Chairmen of the OSCE Minsk Conference to this meeting of the Permanent Council. We would also like to congratulate Mr. Matthew Bryza with his appointment as a new American Co-Chairman and wish him all the best in his new position.

The outcomes of the last two rounds of negotiations in Bucharest and Paris give us a ground to express our frustration with regard to the current state of affairs. It is obvious that there is no progress at present moment. It is very difficult to hope for a substantial breakthrough judging from a position, on which Armenia persists. It is also clear that very soon Armenia will start to refer to its forthcoming elections, especially when neutral parties to the process do not hesitate commenting on the approaching elections as an obstacle for an active and result-oriented peace process.

It is apparent that from the very beginning the Armenians' participation in the Prague process was insincere. They simply, as it is obvious, tried to buy time.

The statements of Armenian officials are full of accusations towards Azerbaijan about its allegedly militaristic intentions. The Armenians are stirring hysteria about oil revenues of Azerbaijan, which we supposedly will direct to military purposes.

First of all, the real situation is that the territories of Azerbaijan are under occupation and Azerbaijan as such has every right, enshrined in the international norms and principles, to liberate its own territories.

Secondly, the Azerbaijani leaders do not call for war. You will not find it in the statements of the President of Azerbaijan. On the contrary, we always confirm our adherence to the process of peaceful settlement and prove it by our deeds. But what can we do when the opposite side abuses this process for buying and winning time? And for that reason the Azerbaijani leaders are enforced to speak about searching other possible ways of solution in case no result is achieved through negotiations. On the other hand, how can we react to the statements of Armenian President and his ministers who encroach upon Azerbaijan's territorial integrity by declaring that Nagorno-Karabakh does not belong to Azerbaijan? All these declarations definitely contradict the norms of international law. Therefore, we deem it necessary to jointly call Armenia to stop infringements on the territories of Azerbaijan.

What concerns military expenditures of Azerbaijan, as we have repeatedly explained, however not seeing a reason to justify ourselves, Azerbaijan is living through the economic boom, and revenues and the state budget are increasing. As a result, part of incomes is spent on military needs. From the point of view of quantitative indicators, we are not exceeding the usual norms of expenditures in a peace time. Moreover, comparative analysis shows that in correlation to its population Armenia is much more militarized in terms of number of military personnel, as well quantity of armaments. There is no need to mention the military alliances, to which Armenia is a party, while Azerbaijan is not. Actually, it is not a gentlemen's manner to count money in someone else's pocket. It should be taken into account that the considerable part of our expenditures goes to salaries, accommodation and other social needs of the military personnel.

We understand the real reason of Armenia's hysteria launched in all international fora. The purpose is to create a smokescreen of its intentions in the occupied territories and to win time, which also appears in Armenia's position in negotiations.

Armenia actively boosts the image of its constructive approach to the settlement process, by utilizing official sources, as well as Armenian diaspora. The distinguished minister Oskanian even said that the Prague Process is based exclusively on the compromise of Yerevan, which as if has agreed to postpone the solution of the status question; and Azerbaijan should have given its consent for stage-by-stage return of occupied territories and then did not keep its promise. Armenia, having forgotten about its beloved democracy, claims to some kind of referendum, which will be based on the results of ethnic cleansing and a priori excludes the opinion of one ethnic community, as a mechanism to define the status. Furthermore, Armenian side presents this referendum as an element of certain compromise, which is allegedly rejected by Azerbaijan. By making such statements, Armenia once again proves our doubts in her as a partner in negotiations.

We proceed from the fact that today the status can not be defined, first of all due to the continued occupation and, secondly, due to the absence of Azerbaijani population in the Nagorno-Karabakh region as a result of ethnic cleansing. Therefore, there are simply no objective conditions for defining the status, which would effectively ensure human rights and normal living conditions in this region of Azerbaijan. The status can only be defined in normal peaceful condition and cooperation of Armenian and Azerbaijani communities, and their constructive interaction in the region with Azerbaijani Government exclusively in the framework of lawful, legal and democratic process. We do not exclude use of voting as a democratic way of defining the attitude of Armenian and Azerbaijani communities to the proposed model of status and their opinions should herewith coincide.

At the same time, as we have already described above, all parties and mediators have accepted the stage-by-stage approach to the settlement process as the only possible option, since it is clear that the status cannot be defined at this stage.

In this case, what is the outstanding contribution of Armenia? In fact, Armenia-advocated mechanisms to define status are as far from democracy as is the policy of this country, which keeps the territories of Azerbaijan under occupation. Since, first, Armenia hinders the return of Azerbaijanis to Nagorno-Karabakh and, secondly, excludes equal consideration of opinions of both communities.

Armenia's behavior at the negotiations proves our concerns. The resettlement of Armenians in the occupied territories around Nagorno-Karabakh testifies that Armenia not only is trying to consolidate the ethnic cleansing in Nagorno-Karabakh, but also to change a demographic situation in other regions of Azerbaijan.

For defining the status, as we have mentioned above, it is necessary to return Azerbaijani population to the region and ensure their interaction with Armenians. This end requires establishment of security conditions in and around the Nagorno-Karabakh region, which naturally envisages liberation of these territories and withdrawal of the occupying forces under the proper international guarantees, international presence, as well as the measures of demilitarization.

But we encounter big problems with the Armenian side, which is trying to keep some of the territories as hostage and to justify this is speculating on security issues. This concerns the Kelbadjar district. They are also trying to appropriate the whole region under the pretext of guaranteeing the preservation of corridor from Nagorno-Karabakh to Armenia. This concerns the Lachin district.

Even the first glance analysis of an extremely complicated mountainous terrain of the Kelbadjar district shows that it is a hard place for a usual crosswalk, let alone the large-scale military movement. It only reaffirms the unreasonable nature of security concerns on part of Armenia. In reality, Armenia tries to keep Kelbadjar as a bargain chip with regard to the status of the Nagorno-Karabakh region. However, such an evident retention of territories will only bring negative consequences and will further aggravate the tense situation in the region. Return of the Kelbadjar district under condition of deployment of international presence there within the framework of realistic state-by-stage withdrawal of troops from all occupied territories will help the parties to successfully overcome this difficulty and switch to the level of constructive interaction.

As far as the security of the Nagorno-Karabakh Armenians is concerned, the Government of Azerbaijan will be ready upon the return of Kelbadjar to guarantee an interim interaction arrangement, which will regulate the life activity of both communities in the Nagorno-Karabakh region through interaction with the Government of Azerbaijan up until the definition of the status.

As for the corridor issue, we call on the Armenian side not to delay the issue and discuss now the parameters of such corridor and its modalities. This will lead to liberation of the Lachin district within the framework of the same withdrawal process of Armenian forces from the occupied territories. We will not allow the annexation of the Lachin district, as well as our other territories. We see constructive solution of the corridor issue in its mutual use by both sides under the protection of international forces. This will in particular provide a connection for the Armenian population of the Nagorno-Karabakh region with Armenia, and Azerbaijan with its Nakhchivan Autonomous Republic.

Thus, as you see, Azerbaijan suggests constructive solutions to the issues of liberation of Kelbadjar and Lachin corridor. In opposite to this constructive solution, we face the intention of Armenia to retain the Kelbadjar district on one hand, and, on the other hand, the attempt to annex the Lachin district. This situation will further hamper the progress in the negotiations.

Azerbaijan is ready to shift away from its extreme position and guarantee the self-governance of the Armenian community of Nagorno-Karabakh within Azerbaijan. In response, Armenia should also shift away from its extreme position on the secession of the Nagorno-Karabakh region from Azerbaijan and non-recognition of the territorial integrity of Azerbaijan.

As we see, in reality it is exactly for this purpose of secession Armenia wants to retain control over the Kelbadjar and Lachin districts, hinders return of the displaced Azerbaijani population to the Nagorno-Karabakh region and insists on holding referendum on the basis of ethnic cleansing.

The President of Azerbaijan views the settlement of the conflict on the basis of self-rule of both communities in the Nagorno-Karabakh region within Azerbaijan via establishment of inter-communal peace and harmony. It is only on this basis President Aliyev sees his own and mediators' efforts within the framework of the Minsk Process, particularly the Prague meetings.

It is obvious that the Armenian side tries to use the process and divert its further efforts to freezing the situation, preserving its military control over Nagorno-Karabakh with the aim of its secession from Azerbaijan. Azerbaijan will never allow this to happen. I hope you do not accept this statement as a call for war.

Mr. Chairman,
In conclusion, in order to disperse the last illusions on with whom we are dealing, I would like to draw your attention to the following. As you may recall, last year the OSCE Fact-Finding Mission brought to light flagrant facts on resettlement policy and other illegal activities by Armenia in the occupied territories of Azerbaijan. This on the whole confirms the real intention of the Armenian side.

Recently we were shocked by the credible information on the incidents of massive fires taking place in the eastern parts of the occupied territories of Azerbaijan, particularly in mountainous and plain terrain used for agricultural and living purposes by Armenians in Aghdam and Khodjavand districts of Azerbaijan. We obtained satellite imagery of those districts and would like to provide you with some details. On the 132.2 sq kilometers area a number of towns, villages, agricultural lands, cultural and historical monuments, existing flora and fauna, living dwellings have been destroyed or burned by the fire.

Comparison of satellite images of 2005 and 2006 shows that these territories in 2005 were completely untouched by fire. Facts prove that these fires have been taking place in the course of May-June 2006. Analyses of the satellite photos confirm that fires are of a large scale and will have disastrous consequences for the entire ecological system of those occupied territories.

The whole burnt area could be divided into five larger parts of almost equal size. More detailed focus demonstrates that these parts are separated from each other by roads, channels and lanes, which remained untouched by the fire. The lanes are clearly seen and their several kilometers width proves that the fire could hardly spread from one part to another bypassing them. Thus, it is apparent that simultaneous inflammation in several areas, separated from each other, and their massive and targeted character gives reasonable ground to suggest that these incidents are man-made and intentional.

Even if they are nature-caused Armenia as the occupying power bears full responsibility for suppressing the fires.

The massive fires will cause serious and to a certain extent irreversible damage to the entire environmental system of the occupied territories of Azerbaijan. Such acts of vandalism and destruction by Armenia must be strongly condemned. Adequate response should be taken to suppress the fire and assess the damage inflicted upon the environment in those territories. In this connection we officially request the Chairman-in-Office to dispatch his Personal Representative Ambassador Kasprzyk to study and assess the situation in the mentioned areas with a view to ensuring their soonest full rehabilitation.

Thank you.