Armenia, Azerbaijan Agree to Extend Their Cease-Fire : Strife: Both sides vow to intensify search for peace in disputed Nagorno-Karabakh area.

The presidents of Armenia and Azerbaijan, brought together by Russian mediators, agreed here Friday night to extend a 4-month-old cease-fire in the disputed territory of Nagorno-Karabakh and to intensify their search for a peace settlement.

“This is a step forward,” Russian Foreign Minister Andrei V. Kozyrev remarked after two days of talks at a Russian government compound. He said there will be “a series of such meetings” leading to a three-way summit involving Russian President Boris N. Yeltsin.

“There we will dot the i’s and cross the t’s and strike a final agreement,” Kozyrev predicted.

The two former Soviet republics have been fighting more than six years for control of the ethnic Armenian enclave within Azerbaijan. Last year Nagorno-Karabakh’s militia, backed by Armenia, drove the Azerbaijani army out of the enclave and seized adjacent Azerbaijani lands.

Worn down by the conflict, which has taken more than 20,000 lives, the two sides agreed to a cease-fire May 12 and have largely observed it. But peace talks have stalled over two procedural disputes:

* Azerbaijan insists that Armenian forces withdraw to Nagorno-Karabakh’s borders before negotiations can proceed; Armenia wants the troops to stay where they are until a settlement is reached.

* Armenia wants Russian peacekeepers to separate the warring parties; Azerbaijan rejects the Russian army as an unfriendly force.

Kozyrev said the talks between Presidents Levon Ter-Petrosyan of Armenia and Heydar Aliyev of Azerbaijan gave “impetus to the negotiating process” but announced no resolution of any dispute.

The two presidents imposed a vow of silence on their negotiators and left Moscow without commenting on the talks.

But Azerbaijani Foreign Minister Gasan Gasanov told his country’s Habar news agency that at least one major issue remains unresolved--Armenia’s insistence on controlling a narrow supply corridor to the enclave through Azerbaijani territory.

Armenian Embassy spokesman Georgy L. Ovanesyan said the two delegations will resume their talks here today at a lower level and work toward more top-level talks.

“This process is irreversible,” he said. “But it is a long-term process.”

Politicians and diplomats in Azerbaijan said in interviews last month that several forces were pushing the two sides toward an agreement. The onset of winter is a threat to fuel-starved Armenia, cut off by a trade blockade organized by Azerbaijan and its allies. And hundreds of thousands of Azerbaijanis made homeless by the war are becoming a burden on their government.

Under a draft settlement now on the table, Armenia would give back most conquered Azerbaijani territory, refugees from both sides would go home, the trade blockade would end and a mixture of Russian and European troops would keep peace.

The draft does not cover the political status of Nagorno-Karabakh itself, a mountainous territory the size of West Virginia inhabited mostly but not exclusively by ethnic Armenians. That issue will go on the agenda for the next summit, the Armenian spokesman said.