, oil-rich Azerbaijan.
The neighbours, whose ties are traumatised by the killings of both sides during the World War I in 1915, are engaged in high-level talks to restore ties after the border was closed in 1993.
HOW WILL THE AGREEMENT AFFECT EUROPEAN ENERGY SECURITY?
The move may have negative consequences for European energy security aimed at reducing dependency on Russia.
Azerbaijan, Europe's key hope for supplying gas for the proposed Nabucco pipeline that would run through Turkey and cut Europe's energy dependence on Russia, has warned any deal between Turkey and Armenia that does not include a withdrawal of troops from Nagorno-Karabakh would raise tensions in the Caucasus.
Azeri Foreign Ministry spokesman Elkhan Polukhov said it was too "too early" to discuss what steps Azerbaijan might take in retaliation, but some analysts have warned it may push Azerbaijan towards Russia, which is offering to buy all their gas at European prices. Other analysts say it is unlikely Baku will redirect all its supplies through Russia.
Last month, Azeri state energy firm Socar signed a memorandum with Russian gas export monopoly Gazprom on starting talks on Russia buying Azeri gas from 2010 for export to Europe.
Turkey is also trying to negotiate a natural gas deal with Azerbaijan. Souring of relations between Turkey and Azerbaijan could put that deal at risk. Azeri President Ilham Aliyev visited Moscow to discuss the border issue last week and said he looks favourably to increasing supplies of gas it sends to Russia.
WHY IS THE BORDER CLOSED?
Turkey closed its land border with Armenia in 1993 in support of ally Azerbaijan, which was fighting Armenian-backed separatists in the breakaway mountain region of Nagorno-Karabakh, a slice of territory claimed by Baku, but populated by ethnic Armenians.
Turkey and Armenia track their own disagreement to the mass killings of both sides during the World War I in 1915.
WILL IT BOOST TURKEY'S EU BID?
While the EU has no specific policy regarding Turkey opening its border with Armenia, the bloc has said it would be beneficial for relations between the EU and Turkey as it would add to the overall stability of the Caucasus.
WILL THE AGREEMENT AFFECT THE STATUS OF NAGORNO-KARABAKH?
Hard to tell. The dispute between Azerbaijan and Armenia over the Caucasus mountain enclave is one of the most intractable conflicts arising from the Soviet Union's collapse. The Minsk group -- set up in 1992 and co-chaired by Russia, the United States and France -- is seeking a solution, but there has been no progress. Turkish government officials have said they will not reopen the border before the status of Nagorno-Karabakh is settled. Baku, which has close linguistic and cultural ties with Ankara, fears losing leverage over Armenia in the dispute if Turkey reopens the border with Armenia and restores full diplomatic relations.
WILL IT BOOST INVESTOR CONFIDENCE IN TURKEY?
The agreement could have positive implications for investors if Turkey can use it to its advantage in its EU negotiations, convincing Brussels that it is on the side of stability in the region and is a key energy transit state. The agreement itself is not market moving. A possible open border would also mean greater trade between Turkey, Armenia and Europe.
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