A 10 July visit by top Armenian leaders to Stepanakert, the capital of the unrecognized Nagorno-Karabakh Republic, appears to have defused--at least for now--tensions between Karabakh President Arkadii Ghukasian and the enclave's powerful defense minister, Samvel Babayan.

Discord between Babayan and Ghukasian first emerged in the spring of 1998, when the latter forced the then head of the Karabakh cabinet to resign. Ghukasian proposed assuming the duties of prime minister himself but was rebuffed by the pro-Babayan parliament. Babayan's preferred candidate, Zhirayr Poghosian, was named premier.

At the end of last month, Ghukasian fired Poghosian and his cabinet without warning. The official explanation was Poghosian's failure to improve the republic's economic situation. But reliable sources in Stepanakert told RFE/RL that the move was triggered by the disclosure of a surveillance device in Ghukasian's office, which Poghosian was suspected of having ordered planted. On 11 July, the Karabakh chief prosecutor revealed that Poghosian has been arrested and will be formally charged with illegal arms possession. It is unclear how that accusation is related to his alleged surveillance activities.

Ghukasian's hail of criticism directed against Poghosian was clearly also aimed at Babayan, to whom the ex-premier was known to be loyal. It also reveals the extent of the president's frustration with his hitherto limited role in Karabakh politics. The new prime minister, Anushavan Danielian, a former deputy parliamentary speaker in Ukraine's Autonomous Republic of Crimea, was Ghukasian's choice, as was the enclave's new interior minister, Artur Aghabekian.

Both of the new appointees, for their part, have come under strong criticism from Babayan's loyalists. Some deputies in the Karabakh parliament are reportedly seeking Danielian's dismissal, while other reports spoke of acts of defiance among police staff directed against their new boss. On 6 July, Babayan's brother Karen, who is mayor of Stepanakert, went on local television to criticize President Ghukasian.

Senior commanders of the Karabakh army similarly expressed their discontent at a meeting with Ghukasian on 6 July. Three days later, 11 senior army officers announced that they have returned all their military decorations to protest what they termed inaccurate media accounts of the 6 July meeting. Those reports claimed they had pledged their backing for Ghukasian in his struggle with Babayan. The presidential press office responded the same day with a statement suggesting that the 11 officers had acted on Babayan's orders.

The Armenian leadership in Yerevan has made clear its unequivocal backing for Ghukasian. On 7 July, President Robert Kocharian's press secretary warned that "Armenia will not act as an indifferent observer with regard to NagornoKarabakh if any illegal attempts are made against its legitimate authorities." That warning suggested Kocharian may be worried that Babayan's political ambitions are no longer confined to Karabakh. A nationalist bloc backed by Babayan won eight seats in the 131-member Armenian parliament in the 30 May elections, while several independent lawmakers are also believed to be under his tutelage. And there is speculation that Babayan's hard line on the conflict with Azerbaijan could thwart Yerevan's future efforts in the peace process.

Unlike his rival politicians, the 33-year-old Babayan does not have a university degree, having risen to prominence on the battlefield. He is largely credited with leading the Karabakh army to victory over Azerbaijan. In the political arena, he has been rather shrewd, largely acting from behind the scenes. But Babayan may have reached the point where any further advance will not be tolerated by others.

Together with Armenian Defense Minister Vagharshak Harutiunian and Interior Minister Suren Abrahamian, President Kocharian, who is Ghukasian's predecessor as Karabakh president, visited Stepanakert on 10 July in a bid to find a way out of the standoff between Ghukasian and Babayan. Government sources there told RFE/RL that Kocharian expressed optimism about the success of his mission after talks with the two rival camps. He told a group of local prominent figures that the problem will be settled "more easily" than had seemed possible, the sources said.

More important, the Armenian president was quoted as saying that "issues related to the [Karabakh] army will definitely be solved" and as reaffirming Armenia's unconditional support for Ghukasian. No official statements to that effect have been made to date, but all the signs are that Babayan will lose at least some leverage as a result.

There seems to be little the defense minister can do now in the face of mounting pressure from Yerevan. The blatant use of the military against Karabakh's civilian authorities would never be forgiven. Such an extreme measure is unlikely, however, not least because Babayan's rivals are offering him a face-saving exit from the crisis whereby he would keep his current post. It cannot be ruled out that Babayan would also be allowed to retain a certain say in key government appointments.

SCHROEDER, KUCHMA FAIL TO AGREE ON CHORNOBYL. At a meeting in Kyiv on 9 July, German Chancellor Gerhard Schroeder and Ukrainian President Leonid Kuchma failed to reach agreement on the closure of the Chornobyl nuclear power plant. Schroeder was unable to persuade Kuchma to accept Western support for developing conventional power plants in exchange for the Chornobyl shutdown in 2000 (see "RFE/RL Newsline," 9 July 1999). Kuchma said later that Chornobyl will be closed only after nuclear reactors in Rivne and Khmelnytskyy are completed to compensate for the power loss. Schroeder said Germany will take no decision on financial aid for Ukraine until September, when the European Bank of Reconstruction and Development is to decide whether to finance the completion of the two reactors. JM

UKRAINIAN PARLIAMENT BANS SALE OF TELECOMMUNICATIONS GIANT. Ukrainian legislators on 9 July voted by 235 to 23 to reject a bill that would have sanctioned the privatization of more than 25 percent of Ukrtelekom, which employs some 130,000 people, while ensuring that the state retains a majority stake in the company. The parliament said there is no need to privatize Ukrtelekom since the company is operating at a profit. Kuchma criticized the decision as a political move, adding that proceeds from the sale would have been used to pay off wage and pension arrears. JM