A Russian-mediated ceasfire has been in place since May 1994, and Russia, the United States, and France have tried to bring the sides closer together.
Relationships between Russia and Azerbaijan were strained when it became known that Russia shipped over $1 billion of arms to Armenia from 1993 to 1995. In the meantime, Armenia and Russia signed an updated friendship treaty at the end of the summer, as well as a deal to create a joint venture with Gazprom of Russia to supply Armenia with natural gas. Armenia's fuel supplies had been constrained by the Azeri blockade, the United States passed section 907 of the Freedom Support Act in October 1992, which restricts U.S government assistance to Azerbaijan until Azerbaijan has taken "demostrable steps to cease all blockades and other offensive uses of force against Armenia and Nagorno-Karabakh". In October 1998, U.S legislation was approved that permitted some some exemptions (including the U.S Export-Import Bank, the Overseas Private Investment Corporation-- OPIC, and the Trade and Development Agency from the bans contained in section 907.
Armenian forces and forces of self-styled Republic of Nagorno-Karabakh continue to occupy 20 percent of Azerbaijan's territory. Exchanges of fire occur frequently along the Azeraijan-Armenian border and along the line of contact with Nagorno-Karabakh causing casualties, including some civilians.

Taken from:
www.fas.org/man/dod-101/ops/war/nagorno-karabakh.htm