Since 1988, the states of Armenia and Azerbaijan have been engaged in conflict over the enclave of Nagorno Karabakh. The conflict has developed into one of the most intractable and complicated disputes in the international arena, with the main parties being the two rivalling sovereign states plus the ¿unrecognised state¿ of Nagorno Karabakh. Despite the optimistic statements and claims by the OSCE and after many years of negotiations and talks, the peace process remains in stalemate. The research argues the virtues of Track Two diplomacy and highlights the successful instances where it has made important contributions to the ¿official¿ or Track One diplomatic process. It also explores the potential of a ¿no war no peace¿ situation by discerning the factors influencing the progress of the conflict. The research shows that a deeper understanding of the obstacles to peace is achieved by appreciating the significance of historical events as well as recognising the motives and interests of the different parties. The study reviews all major factors which have led to the failure of resolution efforts, particular the negative role played by Russia. It concludes that the scholars in the field of conflict resolution can bring about a lasting peace to this region, provided there is a fundamental change in the structure of the co-chairs of the OSCE.