Armenia and Azerbaijan agreed on a deal with Russia to end fierce clashes over Nagorno-Karabakh . Hence option 2 is Correct. Straddling western Asia and Eastern Europe, Nagorno-Karabakh is internationally recognized as part of Azerbaijan , but most of the region is controlled by Armenian separatists. It has been part of Azerbaijan territory since the Soviet era. When the Soviet Union began to collapse in the late 1980s, Armenia’s regional parliament voted for the region’s transfer to Armenia ; the Soviet authorities turned down the demand. Years of clashes followed between Azerbaijanforces and Armenian separatists.