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US President Donald Trump’s Oval Office meeting with NATO Secretary-General Mark Rutte on Monday drew considerable attention for what appeared to be a shift in tone on Ukraine. But amid the headlines, another noteworthy — yet underreported — statement emerged. During a media Q&A, Trump declared that his administration was now close to finalizing a long-term peace agreement between Armenia and Azerbaijan.

This is no small claim. Armenia and Azerbaijan have been in some form of conflict since the collapse of the Soviet Union. What began as fighting in the early 1990s led to a frozen conflict and an Armenian occupation of a sizable chunk of Azerbaijani territory. This conflict exploded into a full-scale war in 2020, which ended in an Azerbaijani victory and the deployment of Russian peacekeepers to the region. By 2023, Azerbaijan had completed the liberation of all its territory taken by Armenia in the 1990s, Russian peacekeepers departed, and Baku and Yerevan started peace talks.

However, a major sticking point remains. As part of the ceasefire agreement brokered in November 2020, Armenia committed to “guarantee the security of transport connections” between Azerbaijan proper and its Nakhchivan exclave via Armenia’s Syunik Province. However, no progress has been made on implementing this pledge.

For Baku, the so-called Zangezur Corridor is a strategic priority. There is no direct land route connecting Azerbaijan to Nakhchivan and access through Armenia would resolve this logistical challenge. Baku has consistently stated that it does not seek Armenian territory, but merely a secure transport link.

Domestic Armenian concerns, coupled with broader regional anxieties, have complicated any effort at compromise

Luke Coffey

Similar arrangements exist elsewhere in the world without raising sovereignty concerns. For instance, the US relies on transit through Canadian territory to access Alaska from the American mainland via the Alaska Highway. Likewise, Oman maintains a transit route through the UAE to connect with its Musandam exclave on the Strait of Hormuz — without infringing on Emirati sovereignty. In both cases, sovereignty remains respected, while practical transit needs are met.

For Yerevan, however, the proposal has become politically toxic. Many Armenians fear that implementing the corridor would weaken their sovereignty or lead to the perception of territorial compromise. These domestic concerns, coupled with broader regional anxieties, have complicated any effort at compromise. Iran, in particular, has pressured Armenia against accepting such an agreement, driven by its long-standing geopolitical rivalry with Azerbaijan.

So, what gives the Trump administration confidence that a final peace is within reach?
To be fair, the Biden administration deserves credit for bringing both sides to the negotiating table in recent years. Trump has largely continued this process. Around the time of Trump’s comments, the US ambassador to Turkiye floated an unusual idea: America could lease and manage the 43km stretch of road in Syunik for 100 years to guarantee its neutrality and security.

Although Yerevan quickly rejected the suggestion, the fact that such creative proposals are being considered reflects an active American diplomatic effort behind the scenes. It also illustrates how this seemingly small strip of land has become symbolic of broader regional dynamics.

Russia, long the dominant powerbroker in the South Caucasus, has been largely sidelined in the current talks. This reflects Moscow’s diminishing influence, which stems from several factors: its overreach in Armenia, intervening in that country’s domestic affairs; recent tensions with Baku over the arrest of Azerbaijani nationals in Russia; and the downing of an Azerbaijan Airlines plane over the North Caucasus earlier this year by Russian air defense missiles. Russia’s faltering war effort in Ukraine has further diminished its credibility across the region.

Iran strongly opposes the Zangezur Corridor. There are two key reasons for this. First, such a route would facilitate greater connectivity between Turkiye and Central Asia — reducing Iran’s own relevance as a transit country. Second, it would diminish Tehran’s influence over Azerbaijan. Currently, Baku relies on Iranian airspace and infrastructure to reach Nakhchivan. If the Zangezur Corridor were to become operational, Iran would lose this leverage.

Russia, long the dominant powerbroker in the South Caucasus, has been largely sidelined in the current talks

Luke Coffey

Turkiye, meanwhile, sees the corridor not just as a logistical link but as a manifestation of a larger geopolitical and ideological vision. The road and rail connections through Armenia would link Anatolia to the Turkic states of Central Asia — Kazakhstan, Uzbekistan and beyond. This would physically tie together a broader Turkic world, which Ankara seeks to strengthen through forums like the Organization of Turkic States.

For the US, the Zangezur Corridor reflects a broader dilemma: how to engage effectively in a strategically important but geographically distant and complex region like the South Caucasus. While Trump touts his record of avoiding new wars, it is worth remembering that the Second Nagorno-Karabakh War erupted during his first term in 2020. That conflict, and the ceasefire it produced, laid the foundation for today’s geopolitical situation in the region.

Still, Trump’s administration has invested considerable diplomatic energy into peacemaking — from Ukraine to the Middle East to Africa. The Armenia-Azerbaijan conflict offers another opportunity to “make a deal.” But like most issues in the South Caucasus, the reality is far more complicated than it may first appear.

That is why the US leasing a corridor through Armenia, while innovative, is unlikely to gain traction. It faces domestic resistance in Yerevan, legal and sovereignty concerns, and geopolitical opposition from Russia and Iran. Yet the broader goal — peace between Armenia and Azerbaijan — is both worthwhile and achievable.

Normalization between these two neighbors would have cascading benefits. It would pave the way for diplomatic ties between Turkiye and Armenia, which would open new trade, energy and transportation opportunities across the South Caucasus. Armenia, long excluded from regional infrastructure projects due to its conflict with Azerbaijan, would stand to gain significantly. This comes at a time when Armenia’s economy is under pressure and its foreign policy orientation is slowly drifting away from Russia and toward Europe.

For Washington, a stable South Caucasus aligns with US interests. It would enhance regional connectivity and reduce vulnerabilities in NATO’s energy security — especially important given Europe’s increasing reliance on Caspian energy resources as an alternative to Russian supplies.

Whether the Trump administration can ultimately broker a lasting peace between Armenia and Azerbaijan remains uncertain. But it deserves recognition for trying. With sustained effort, strategic creativity and regional buy-in, the US has a real chance to help end one of the post-Soviet world’s longest unresolved conflicts.

• Luke Coffey is a senior fellow at the Hudson Institute. X: @LukeDCoffey