NATO Secretary-General Jens Stoltenberg on Tuesday touted an opportunity for permanent peace between South Caucasus rivals Armenia and Azerbaijan and urged the pair to sign a long-negotiated peace agreement after Baku seized the breakaway Karabakh region from Armenian separatists.

Both countries' leaders have recently said that they were closer than ever to the signature of a comprehensive peace deal, following years of fruitless internationally mediated negotiations.

"Armenia and Azerbaijan have an opportunity to achieve an enduring peace," Stoltenberg said during a news conference in Yerevan alongside Armenian Prime Minister Nikol Pashinyan.

"I urge both countries to reach an agreement paving the way for normalization of relations and a durable peace for your people," he added.

Stability in the volatile Caucasus region "matters for the Euro-Atlantic security."

Last year, Azerbaijan carried out a lightning military operation in Karabakh that saw Baku recapture the mountainous enclave from Armenian separatist forces who had controlled it for three decades.

In the aftermath, the entire Armenian population fled Karabakh for Armenia.

In December, the South Caucasus neighbors issued a joint statement saying they wanted to reach a peace deal. They have since held numerous talks, including two days of negotiations in Berlin in February.

Christian Armenia and mostly Muslim Azerbaijan went to war twice over the breakaway region of Karabakh, occupied by its ethnic Armenian majority since the 1990s despite being internationally recognized as part of Azerbaijan.

The sides first fought in 1988 and again in the fall of 2020, ending after a Russian-brokered peace agreement that also opened the door to normalization.

Armenia described the offensive as ethnic cleansing. Azerbaijan denied that and said those who fled could have stayed on and been integrated into Azerbaijan.

Key elements in securing a treaty are demarcating borders and establishing regional transport corridors through each other's territory.

Armenia has also raised the issue of determining control of ethnic enclaves on both sides of the border. Azerbaijan wants its neighbor to return four villages it says Yerevan is occupying.

Pashinyan on Monday warned another war could break out if Yerevan does not compromise with Baku on returning some strategic Azerbaijani territories that Armenia has occupied since the early 1990s.

Pashinyan was speaking during a meeting with residents of border areas in northern Armenia's Tavush region, close to a string of deserted Azerbaijani villages that Yerevan has occupied since the opening phases of the countries' three-decade conflict in the early 1990s.

Tass quoted Pashinyan as saying in a video of the meeting circulated by his government: "Now we can leave here, let’s go and tell that no, we are not going to do anything. This means that at the end of the week, a war will begin."

Pashinyan has repeatedly signaled in recent weeks that he is willing to return the villages to Azerbaijan, which are important for Yerevan, as they control its main road northwards to the border with Georgia.

Azerbaijan has said that the return of its lands is a necessary precondition for a peace deal to end three decades of conflict over Karabakh.

They have said they want to sign a formal peace treaty, but talks have become bogged down in issues including the demarcation of the countries' 1,000-kilometer (620-mile) border, which is closed and heavily militarized.

Both Armenia and Azerbaijan continue to occupy lands that are internationally recognized as part of the other's territory.