Armenia and Azerbaijan are advancing towards normalizing ties following mutual recognition of territorial integrity, the two countries leaders said Thursday as they held talks in Moscow.

Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev met separately with Russian leader Vladimir Putin before the three held joint negotiations late on Thursday.

"There is a possibility of coming to a peace agreement, considering that Armenia has formally recognized Karabakh as part of Azerbaijan," Aliyev said ahead of talks.

"Azerbaijan has no territorial claims to Armenia," he added.

Pashinyan said the two countries were "making good progress in normalizing relationships, based on mutual recognition of territorial integrity."

He said Yerevan was ready "to unblock all the transport links in the region that pass through Armenian territory".

Putin said that "despite all the difficulties and problems that still remain, the situation is developing towards the settlement" of the Karabakh conflict.

He said the three countries' vice prime ministers will meet in a week's time in Moscow "to resolve the remaining issues," regarding the reopening of