Azerbaijan and Armenia are unlikely to reach a deal this year over Nagorno Karabakh and there is a risk of the region sliding towards a war, the Republic's Prime Minister said.

"If we manage to end the year peacefully then that will be constructive, but in terms of concrete accords to resolve the conflict, I'm not optimistic for this year," Araik Harutyunyan told Reuters in Paris during a visit to meet Franco-Armenian investors.

"Neither Karabakh nor Azerbaijan would benefit from a war as I don't think either country would win outright, but we can't rule it out," Harutyunyan said.

"I think that a new war would lead to a huge humanitarian crisis and be extremely bloody," he added. "The losses would be much greater than before - hundreds of thousands killed and injured - because of the arms race of the last few years."

Harutyunyan, who fought in the 1991-1994 conflict, said that for the moment public opinion in Azerbaijan and Armenia was not ready for a compromise, making it much harder for their leaders to accept any settlement.