Armenia threatens to recognise disputed Karabakh

YEREVAN, March 20 (Reuters) - Armenia should recognise Azerbaijan's separatist region of Nagorno-Karabakh as an independent state if Azerbaijan does not change its approach to peace talks, Armenia's president said on Thursday.

"If Azerbaijan continues in this same spirit, then our step should be to recognise the independence of Nagorno-Karabakh and sign agreements with it. In any event that is what I would do," President Robert Kocharyan, who steps down nest month, told a news conference.

Nagorno-Karabakh's ethnic Armenian population split from Azerbaijan in a war in the 1990s and now runs its own affairs, with support from Armenia. It has declared its independence from Azerbaijan, but this has not been recognised by any state.

The separatists have said they hope Kosovo's declaration of independence from Serbia earlier this year will strengthen their own claim for international recognition.

Armenia reacted angrily after the United Nations General Assembly this month adopted an Azeri-drafted resolution demanding that Armenian forces withdraw from Azerbaijan's territory.

Azerbaijan says Armenia has illegally occupied Nagorno-Karabakh, and a number of Azeri districts surrounding the region. It says it is committed to stalled peace talks but has refused to rule out using force to restore its control.

Azerbaijan and Armenia are observing a fragile ceasefire but they are still officially at war and their troops frequently fight skirmishes along a heavily mined front line. Up to 16 troops were killed in a clash earlier this month.

Kocharyan is to step down next month when his long-time ally Serzh Sarksyan takes over as president. Kocharyan -- who like Sarksyan is a native of Nagorno-Karabakh -- is expected to retain influence over policy.

Kocharyan declared a 20-day state of emergency on March 1 after eight people were killed in clashes in Yerevan between riot police and opposition protesters who were demanding the annulment of a presidential election won by Sarksyan.

"I do not see any reason whatsoever to extend the state of emergency," said Kocharyan on Thursday.

"I must hand over a stable country and government to the next president. We were not able to prevent the events of March 1 but we were able to prevent more serious consequences." (Writing by Christian Lowe; editing by Giles Elgood)