BAKU - Armenia has agreed to return several villages to Azerbaijan in what both sides said on Friday was an important milestone as they edge towards a peace deal after fighting two wars since the collapse of the Soviet Union.

Azerbaijani Foreign Ministry spokesperson Aykhan Hajizada posted on X that Armenia would return four villages near the countries' shared border that had been "under occupation" since the early 1990s, and called it a "long-awaited historic event".