With the backdrop of expanding U.S.-Azerbaijan contacts, Russian-Azerbaijani relations starting seeing some activity at the end of February. Visits to Baku of the head of the Russian parliamentary, delegation in PACE Dmitry Rogozin, the secretary of Security Council of the Russian Federation Vladimir Rushaylo, and Minister of Defense Sergey Ivanov, seem to be a result of the moderate policies followed by both countries in the past years, seeking to find common positions on numerous issues. It is noteworthy that the foreign policy line of Russia in the Caucasus has always been directed to keep a balance of forces, and not to allow foreign military presence on its southern border. There are reasons for Russia’s anxiety. Under the umbrella of protection of existing and projected pipelines, Azerbaijan and Georgia actively discuss with NATO an opportunity to get appropriate aid - both military, technical, and financial. The Azerbaijani and Georgian armed forces are gradually though slowly adapting to NATO standards. Their relations with NATO are obviously beyond the Partnership for Peace program, causing Russian worries. Russian Defense Minister Sergey Ivanov visited Baku on February 26 and 27. During the visit, two documents were signed. First, an agreement of bilateral cooperation between the Ministries of Defense for 2003, and second, an Agreement on military-technical cooperation between Azerbaijan and Russia. This is the first document since the end of the Soviet era that regulates the military-to-military dialogue between Moscow and Baku. By this agreement, Russia has strengthened its military links to Azerbaijan and has expanded the prospects of arms sales in the Caucasus. Contrary to Baku’s protests against the sale of Russian weaponry taken from Georgia to Yerevan, Moscow has not changed its intentions. But as an indemnification to Azerbaijan, it has decided to sell arms and military technology to Azerbaijan. According to the Russian Ministry of Defense, this will “restore the imbalance of forces in the region”. The document signed in Baku provides an opportunity of the conclusion of concrete agreements and contracts on the delivery of samples of arms, military equipment, spare parts, and the training of military personnel. For 2003, cross-visits of military delegations, the training of the Azerbaijan military personnel Russian Ministry of Defense academies, and military exercises with the invitation of military representatives from other countries are planned. At a joint press conference after the negotiations, Azerbaijani Defense minister Safar Abiev declared, “if the territories occupied by Armenians will not be released, Azerbaijan will be compelled to restore its territorial integrity”. Abiyev stated this in an answer to a question regarding Azerbaijan’s preparation to military action in Nagorno-Karabakh. He added that the territory of Nagorno Karabakh has contacts with terrorist regimes, and is a training place for terrorism. According to local analysts, the agreement signed between the heads of Defense of Russia and Azerbaijan have great political value and comparable favorably to those between Russia and other CIS countries. Observers consider that today, with Azerbaijan included in the sphere of U.S. strategic interests, it is extremely important for Moscow to build flexible and friendly relations with Baku. Now Azerbaijan uses heavy and simple Russian weaponry. But in due course, when, as military experts consider, the re-equipment of the national army with NATO weapons will begin, Moscow’s influence will weaken considerably, not only in Azerbaijan, but also in the entire Caucasus. Political scientist Rasim Musabekov argues that Moscow knows that Azerbaijan also has financial assets to purchase weapons at present. “Azerbaijan may be the only former republic of the USSR with no debt to Russia. In fact, Moscow has a debt to Baku for the Gabala Radio Station, which totals about 100 million dollars. The Azerbaijani side can easily spend this Russian debt purchasing arms”. Only several years ago, such a positive development in military relations would have been impossible. Public opinion in Azerbaijan, especially in the first years of sovereignty, was strongly convinced that Russia helped Armenia. Russia’s relations with Armenia in the military field prevented the development of Russian-Azerbaijan military relations. Now this barrier seems to be overcome, and helps to remove stereotypes remaining in this sphere of mutual relations.