Yerevan /Mediamax/. Following the Washington Declaration and the initialing of the Peace Agreement facilitated by US President Donald Trump on August 8, 2025, the likelihood of military escalation between Armenia and Azerbaijan has significantly decreased, while prospects for a peaceful settlement have improved. This is outlined in the 2026 annual report on Armenia’s external risks, published by the Foreign Intelligence Service (FIS) of the Republic of Armenia.

The FIS report “considers it unlikely that a military escalation of various scales between Armenia and Azerbaijan will occur in 2026 due to military-political intentions.”

“In 2026, further progress is expected in the processes of demarcation and delimitation. If regional infrastructures are unblocked, existing initiatives are likely to advance, and Armenia’s bilateral connectivity efforts with neighboring countries will help stimulate broader regional economic projects,” the report adds.

The service’s analysis notes that the so-called “Western Azerbaijan” and “return of Western Azerbaijanis” promoted by Azerbaijan at the state level are a significant negative and risk factors for peacebuilding in the long term. The FIS notes that after the Washington Declaration, Azerbaijan has not only failed to reduce, but also significantly intensified this propaganda, which “creates significant risks for regional stability, security, and long-term peace.”

The report further notes that Azerbaijan’s military spending continues to grow:

“Growth rates in military spending significantly exceed other sectoral spending, often at the expense of other sectors. Military spending in 2026 increased by approximately 44%, while other sectoral spending rose by only 7.4%.”