The European Union says conclusion of Azerbaijan and Armenia talks and agreement on the text of a possible treaty, "a decisive step."

A day after arch-foes Armenia and Azerbaijan announced they were ready to sign a long-awaited peace treaty, scepticism ran high Friday among Yerevan residents, while cautious optimism prevailed in Baku.

Armenia's Foreign ministry said on Thursday that a draft peace agreement with Azerbaijan had been finalised from its side and that it was ready to discuss a date and location to sign a final deal. Armenia and Azerbaijan have fought a series of wars since the late 1980s,