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LUXEMBOURG, (Reuters) - Armenia accused its arch-foe Azerbaijan on Tuesday of exploiting current fears over terrorism after the attacks on the United States to block progress on their long-running territorial row over Nagorno-Karabakh.

"We are very concerned about the exploitation by our adversaries, especially Azerbaijan, of the terrorism issue and trying to put the Karabakh conflict in that context...in the hope of gaining the sympathy of the international community,"
Armenian Foreign Minister Vartan Oskanian told reporters.

"That is wrong and could lead down a very dangerous path...For Azerbaijan it is dangerous because it could become a self-fulfilling prophecy," he said after talks in Luxembourg with senior European Union officials.

Oskanian noted that the attention of the United States and other key powers has been deflected from the Caucasus region by the September 11 attacks on New York and Washington and the ensuing U.S.-led air strikes against Afghanistan. "Other conflicts are taking a second seat. The distraction of the major players is worrying," he said.

Last week, Azeri President Heydar Aliev warned visiting European officials that his country could go to war with Armenia over Karabakh if Europe does not take a stand against the ethnic Armenian separatists in the region.

Oskanian said Armenia hoped that Aliev’s comments were made purely for domestic public consumption and did not reflect a serious shift away from dialogue. On a brighter note, Oskanian said officials representing the Organization for Security and Cooperation in Europe (OSCE), mediator in the Karabakh conflict, will meet shortly in Portugal and will visit Armenia on November 6.

On Monday evening, he held informal talks over dinner with the senior EU officials and his Azeri and Georgian counterparts in Luxembourg that focused on regional conflicts and terrorism. "Despite the rhetoric from Azerbaijan, we agreed that the
only way out of the (Karabakh) conflict is a political, negotiated settlement," said Oskanian.

The EU urged Georgia to tackle rampant corruption, pressed Armenia to close down its Metsamor nuclear plant and expressed concern about press freedoms in Azerbaijan. Asked whether the three Caucasus republics might one day realize their dream of joining the EU, Belgian Deputy Foreign Minister Annemie Neyts said: "My personal answer is that, ultimately, yes they should...but that would be in the long-term, if not the very long-term."
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