YEREVAN, November 3 (RIA Novosti, Gamlet Matevosyan) - Armenian President Robert Kocharyan said Thursday that the self-proclaimed republic of Nagorny Karabakh in Azerbaijan with a predominantly Armenian population, was nearly an independent country, which had confederative relations with Armenia.

Kocharyan made this statement, while meeting with students and professors of the law department in Yerevan State University, to comment on Azerbaijani President Ilkham Aliyev's claim that Nagorny Karabakh would never be annexed to Armenia or granted independence.

Kocharyan said talks on the problem should continue on the basis of compromise.

"Armenia is ready for a compromise. However, concessions in vital issues mean defeat," he said.

According to Kocharyan, any outcome of the constitutional referendum, due to be held in Armenia November 27, will have no direct impact on the problem of Nagorny Karabakh.

"I am sure that if the constitutional reforms are backed, we will have an advantage in terms of the resolution of the Nagorny Karabakh conflict. The better Armenia's image, the more allies we will have," Kocharyan said.

The armed conflict in Nagorny Karabakh in the early 1990s left dozens of thousands of people dead. Hundreds of thousands of people became refugees. Military operations were stopped there on May 12, 1994.