By Gleb Bryanski
MOSCOW (Reuters) - International mediators from the Organisation for Security and Co-operation in Europe said on Monday that Azerbaijan's decision to pardon an Azeri soldier who killed an Armenian officer had damaged the peace process in the region.
Armenia and Azerbaijan have been at odds since the war between ethnic Azeris and Armenians that erupted in 1991 over the mainly Armenian Nagorno-Karabakh enclave. A ceasefire was signed in 1994 but new cross-border clashes this year have prompted worries of a resumption of fighting.
Azerbaijan's president, Ilham Aliyev, last week pardoned Ramil Safarov, who had been sentenced to life in prison in Hungary for the 2004 killing of Armenian officer Gurgen Markaryan during NATO training but was sent back to Azerbaijan.
Armenia suspended diplomatic relations with Hungary, calling Hungary's decision to send back Safarov "a grave mistake".
Safarov was given a hero's welcome in Azerbaijan, where thousands of people took to the streets to greet him in his native city of Sumgait. The government promoted Safarov to the rank of major and paid his salary for eight years.
The OSCE Minsk group, which includes representatives of the United States, Russia and France and is mediating between Armenia and Azerbaijan, met the two countries' foreign ministers after the pardon threatened to inflame tensions.
"They (Minsk Group representatives) expressed their deep concern and regret for the damage the pardon and any attempts to glorify the crime have done to the peace process and trust between the sides," the group said in a statement.
Azerbaijan said its president acted in line with the law and dismissed criticism from the Europe, Russia and United States - as well as Armenia's reaction.
"The hysterical approach of the Armenian leadership was targeted at the local population and was meant to be a populist political show," Azerbaijan's Foreign Ministry spokesman Elman Abdullayev said.
The White House said on Friday President Barack Omama was "deeply concerned" by the pardon, saying in a statement: "This action is contrary to ongoing efforts to reduce regional tensions and promote reconciliation."
U.S. Secretary of State Hillary Clinton said during a visit to Armenia in June that violence between Armenia and Azerbaijan could lead to a broader regional conflict.
Armenia's regional ally Russia expressed concern on Monday over "possible negative consequences" of the decisions made by Azeri and Hungarian authorities, as well as impact they may have on stability in the region.
"When it comes to the U.S. position, we still do not understand the third countries' interference ... I do not think that the U.S. position is understandable," Abdullayev said, reiterating that the handover and pardon were within the law.
Hungary, as well as other Western countries, has been developing economic ties with energy-rich Azerbaijan, which is host to oil majors including BP, Chevron and ExxonMobil.
(Additional reporting by Orkhan Badalov in Baku, Marton Dunai in Budapest, Margaret Chadbourn in Washington; Writing by Gleb Bryanski; Editing by Alison Williams)