Fears are rising that Azerbaijan and Armenia are entering an arms race, which could undermine US-backed peace talks and trigger a new conflict.

Azerbaijan showcased its military might in a grand parade in Baku last year to celebrate its victory in recapturing the Nagorno-Karabakh enclave from Armenian-backed forces.

Azerbaijan, buoyed by its oil wealth, is continuing its aggressive rearmament programme, heavily relying on Turkey for military support.

“The Turkish defence industry and Turkish military equipment will be providing further arms to protect Azerbaijan," predicts Huseyin Bagci, a professor of international relations at Ankara's Middle East Technical University.”

However, Bagci noted that Azerbaijan is also turning to another ally for advanced weaponry.

“Israel is much better in this respect. Azerbaijan buys the highest technology from Israel, and Israel is providing it.”

Turkish and Israeli arms played a crucial role in Azerbaijan's recent military successes, overwhelming Armenian-backed forces that relied on outdated Russian equipment.

Armenia's response

In response to its loss of Nagorno-Karabakh, Armenia is also ramping up its military capabilities, with France leading the supply of new, sophisticated weaponry.

Paris argues that this support helps Armenia shift its focus away from Russian reliance and towards Western alliances.

Yerevan maintains that its rearmament is purely for self-defence.

“Right now, there is no military parity between Armenia and Azerbaijan," says Eric Hacopian, a political consultant in Armenia.

"The goal is to create deterrents to make any aggression against Armenia more costly. In the medium term, we aim for equality, and in the long term, superiority.”

Stalled peace talks

The rearmament comes amid stalled peace talks, with Baku concerned that Yerevan’s military buildup might indicate ambitions to retake Nagorno Karabakh.

“The truth is our territory was under occupation, so we worry that in five, 10 years, Armenia will rearm its military, strengthen military capacities, and will come back,” warned Farid Shafiyev, chairman of the Baku-based Centre of Analysis of International Relations.

Yerevan maintains that its rearmament is purely for self-defence.

“Right now, there is no military parity between Armenia and Azerbaijan. The goal is to create deterrents in the short run to make any aggression against Armenia far more costly than it has been in the past,” says Eric Hacopian, a political consultant in Armenia.

“Two is to create equality in the middle term and in the long term superiority. You can’t have any other goal when your country is constantly under threat, or attack is the only way to respond to it."

Hacopian also notes: “The moment Armenia can defend itself, then the game is up because Ilham Aliyev is not going to risk a war that he is not guaranteed to win; Armenia rearming means he is not guaranteed to win a war which he means he won’t launch one.”

However, Hacopian acknowledges that the coming year will be dangerous for the region as Yerevan seeks to close the military gap with Azerbaijan.

"Next year is the year of living dangerously because next year is the last year that they can do a major aggression against Armenia without having to face the consequences because the gap is closing. Once it closes, the game will be up,” he says.

Ongoing tensions

Earlier this month, Armenian and Azerbaijani forces exchanged fire in a border skirmish, underscoring the ongoing tensions between the two nations.

Both Baku and Yerevan insist their military enhancements are for defensive purposes.

However, Bagci warns that the arms race is turning the region into a potential flashpoint.

“Armenia and Azerbaijan are like two children; they play with fire, and the house is burning, and everybody is asking the big powers why the house is burning and who has done it. They have done it together,” he says.

Despite their rearmament, both Armenia and Azerbaijan claim to remain committed to the US-backed peace process.

Analysts, however, warn that the escalating arms race could deepen mutual suspicions and further complicate efforts to achieve lasting peace.