TEHRAN -- Iranian Foreign Minister Manuchehr Mottaki says there has been "serious progress" in his country's relations with Armenia.
"In its foreign policy, Iran attaches great importance to the development of relations with neighboring states, and Armenia occupies a special place in this context," Mottaki told panarmenian.net on September 2.
"Serious progress has been registered in Armenian-Iranian relations and in the economic sphere in particular."
He said Tehran and Yerevan should negotiate a free-trade deal in order to continue improving their relations.
Mottaki said that "we need to take concrete steps such as the elaboration of an agreement on a free-trade zone and privileged tariffs, which would help to elevate our relations to the proper level."
He also reaffirmed his government's readiness to mediate talks to resolve the dispute over the breakaway Azerbaijani region of Nagorno-Karabakh, which is populated and controlled by ethnic Armenians.
He added that Iran could only "complement other efforts in this direction," in reference to the mediation efforts by the Organization for Security and Cooperation in Europe's Minsk Group, which is co-chaired by the United States, Russia, and France.
But Mottaki added that "regional conflicts should be settled by regional countries."
Iranian Ambassador to Armenia Seyed Ali Saghaeyan made it clear in June that Iran is categorically against any U.S. participation in a multinational peacekeeping force that would presumably be deployed around Nagorno-Karabakh after the signing of an Armenian-Azerbaijani peace accord.
Armenian President Serzh Sarkisian pledged in a written statement on September 1 marking the 19th anniversary of Karabakh's declaration of independence from Azerbaijan that Baku would never regain control of the territory.
Nagorno-Karabakh's declaration of independence is not recognized by any countries, including Armenia.
Mottaki cited joint commercial projects devised by the two governments as evidence of their improved relations. In particular, he confirmed that they have reached "final agreements" to build a major hydroelectric station on the Araks River marking the Armenian-Iranian border and a third high-voltage transmission line linking the countries' power grids.
Armenian Energy Minister Armen Movsisian said in July that work on these two projects as well as the planned construction of a pipeline that will pump Iranian fuel to Armenia will get under way by the end of the year.