YOUR VISIT TO ARMENIA

1. (C) We look forward to welcoming you on your first trip
to the region wearing both your co-chair and DAS hats. The
situation on the ground here in Yerevan has changed somewhat
since your last visit in March. While your visit will be
brief, your meetings with key leaders will offer us an
opportunity to move forward on several fronts.



2. (C) Yerevan is managing the spin of the failure of
Bucharest far better than it did following Ramouillet. Now
that they have recovered from the initial shock of the
co-chairs' June 22 statement, the Armenians have clearly
staked out the high ground, claiming that whereas Armenia was
ready to take the deal on the table, it was Azerbaijan which
balked. Whether this assertion is true or not, all of
Armenia's leaders have picked up the theme, and you should
expect to hear this refrain in your meetings with President
Kocharian, FM Oskanian, and Parliamentary Speaker Torosian.
A healthy, vigorous, very public discussion of the elements
of the deal on the table continues in Armenia. The public
here had been prepared, to a certain degree, for release of
these elements, as they had been "leaked" to the press from
time to time over the past year. All of Armenia's credible
leaders acknowledge publicly that withdrawal from at least
most of the occupied territories must precede any deal. In
this, at least, Armenia's public is being prepared for peace.



3. (C) Armenia's political situation is heating up, even
though elections are still nearly ten months away. After the
largely self-induced political flameout of former Parliament
Speaker Artur Baghdassarian, the Republican Party of PM
Markarian is clearly ascendant. When Defense Minister Serzh
Sargsian joined the party on July 22, a stampede of business
and political heavyweights (not all of whom qualify as solid
citizens) joined the Republicans as well. Kocharian has not
publicly backed any party, but we hear he may be considering
throwing his support behind the inexperienced "Prosperous
Armenia" party as a counterbalance to the Republican
juggernaut.



4. (C) Our efforts with the international community to build
democratic institutions in advance of elections continue.
Key discussions are now ongoing in the parliament about
changes to the electoral code, and a meeting with the
soft-spoken current Parliament Speaker Tigran Torisian would
be an opportunity to advance this process. Torosian was one
of the key authors of the amendments to Armenia's
constitution, which -- although they were largely supported
by the international community -- were adopted in a seriously
flawed referendum last November.



5. (C) You were on the front pages of Armenia's press every
day for nearly two weeks following your interviews in late
June. Discussion about the NK elements released by the
co-chairs in Vienna has become more general; it took some
time before the press here fully acknowledged that this was
not a solo act, but rather the fully-cleared position of all
three co-chairs. You can usefully underscore the unanimity
of the co-chairs in any public remarks in Armenia. Press
coverage of Ambassador-designate Hoagland's confirmation
hearings continues, but you should not allow it to distract
you from the main business at hand.
EVANS