Armenia is ready to discuss the Nagorny Karabakh settlement with Azerbaijan on the basis of proposals made during talks between the two countries' presidents in St. Petersburg, Armenian media said, quoting President Serzh Sargsyan.

Sargsyan and his Azeri counterpart Ilham Aliyev discussed the Nagorny Karabakh issue in Russia's second city on June 18. A long-standing dispute over the breakaway region inside Azerbaijan with a predominantly ethnic Armenian population has been a sticking point in relations between the two countries.

The St. Petersburg talks were initiated by Russian President Dmitry Medvedev. Russia, along with the United States and France, is part of the OSCE Minsk Group mediating the conflict.

During the talks, Sargsyan and Aliyev agreed to continue negotiations on the basis of the OSCE Madrid principles adopted in November 2007. They envisage a stage-by-stage resolution of the Armenian-Azerbaijani conflict that should start with the gradual liberation of parts of Azerbaijan bordering Karabakh that were partly or fully occupied by Karabakh Armenian forces during the brutal war over the region in early 1990s.

"The talks will go on after Azerbaijan accepts proposals of the OSCE Minsk Group," Sargsyan was quoted by media reports as saying.

The conflict over Nagorny Karabakh first erupted in 1988, when the region claimed independence from Azerbaijan to join Armenia. The 1991-94 war claimed more than 30,000 lives on both sides. Karabakh has since remained under Armenian control.

YEREVAN, July 22 (RIA Novosti)