Posted by Fuchs

The conflict between Azerbaijan and Armenia is brewing- Azerbaijan is able to spend a lot on its military with oil money, and it does so. The military spending figures grow dramatically.
Reports about the attitudes in Baku are alarming.
You definitely called this one correctly, the recent events over the released Azeri murderer being welcomed home as a hero, promoted, and given back pay have brought the level of hatred between the belligerents out into the open for the rest of us to see.

Assuming this does escalate into a conflict it may have significant regional implications that impacts the U.S., Russia, Iran, Turkey, and Georgia, all of which will have interests they'll use the conflict for to pursue.

http://www.eurasianet.org/node/65867

No evidence from Safarov's 2006 trial in Budapest suggests either claim is true. But some Azerbaijani observers say the legacy of the Nagorno-Karabakh war and a steady diet of government anti-Yerevan invective have combined to cement an almost pathological hatred of Armenians in the minds of many Azerbaijanis.

"It's not only the Armenian soldiers and officers who are occupying our land that Azerbaijanis consider their enemy," says Baku-based political analyst Zardusht Alizadeh. "It's not only the 'Armenian terrorists' who were killed in the fighting. Because of a very skillfully constructed propaganda campaign, it's all Armenians who are considered the enemy. That's why a man who killed an Armenian in his sleep is automatically categorized as a hero."
This looks like we're reading the prelude to war, and I don't see much hope for a peaceful intervention. Seems to have little to do with economic development issues, although both sides are underdeveloped, and everything to do with honor, fear, and hatred.