The potential for large-scale hostilities over the Nagorno Karabakh conflict will remain in 2017, the United States Director of National Intelligence Daniel R. Coats said in a report published on Thursday, May 11.

Tensions between Armenia and Azerbaijan over Karabakh flared in April 2016, the report said, adding that both sides’ unwillingness to compromise and mounting domestic pressures suggest that the potential for large-scale hostilities will remain in 2017.

"In Azerbaijan, ongoing economic difficulties are likely to challenge the regime and increase its tendency to repress dissent to maintain power while it continues to try to balance relations with Russia, Iran, and the West," the reports said.

Azerbaijan on April 2, 2016 launched an overt military offensive against Karabakh which left hundreds dead on both sides. Top Armenian and Azerbaijani officials reached an agreement on the cessation of hostilities on April 5 in Moscow.