Addressing reporters in Baku, Fried also cautioned against resumption of hostilities between Azerbaijan and Armenia over the disputed enclave of Nagorno-Karabakh.
"The process of Azerbaijanis returning to Azerbaijani lands should begin as soon as possible and the war would be a catastrophe for everyone."
An estimated 600,000 Azeris and Kurds from areas surrounding Karabakh were driven from their homes when Armenian forces moved into Azerbaijan in the early 1990s.
The United States co-chairs the Minsk Group of nations that have been charged by the Organization for Security and Cooperation in Europe (OSCE) to help Armenia and Azerbaijan settle their 18-year-old dispute. France and Russia are the other co-chairs.
Steven Mann, the U.S. envoy to the Minsk Group, today said in Baku that both Armenia and Azerbaijan have an opportunity to achieve some of their demands this year.
Mann and Fried are expected to travel to Armenia later this week before attending a Minsk Group meeting in Istanbul.
(with additional material from Turan, Day.Az, APA)