The present study considers the problem of concluding a peace treaty between Armenia and Azerbaijan with the use of foreign policy applied analysis methods. Late 2022 – early 2023 conflict dynamics shows that both parties to the conflict are willing to reach practical agreements by signing a peace treaty that is capable of ending the Nagorno-Karabakh conflict. The scientific novelty of the article is to determine with methods of applied and situation analysis how the actions of major external actors affect the process of reaching a peace treaty between Armenia and Azerbaijan. The study uses the hierarchical decomposition method by producing the multi-level decision tree to determine key Armenian-Azerbaijani contradictions and identify the prospects for a negotiated peace between the parties to the conflict. The issues of the access of Armenia to Nagorno-Karabakh, the status of the Nagorno-Karabakh Republic and the participation of external actors were defined as the key problems. The authors concluded that the most likely scenario is the signing of a peace treaty between Armenia and Azerbaijan before 2024. Moreover, Russia along with France, the United States, Turkey and Iran is an important actor in the region. In the period from November 2022 (the end of the Second Karabakh war) to the present day Russia remains a primary mediator in the Nagorno-Karabakh conflict resolution. Thus, despite the renewed efforts of the United States to broker a peace deal Russia is unlikely to be ousted from the South Caucasus.