YEREVAN: Armenia warned Azerbaijan it was ready for war as tensions soared Monday between the ex-Soviet foes after Baku pardoned and promoted an Azerbaijani officer who axed an Armenian soldier to death.

Azerbaijan President Ilham Aliyev last week immediately pardoned Ramil Safarov after he was extradited from Hungary, where he had been serving a life sentence for the 2004 killing.

Safarov was also promoted to the rank of major, given a house and eight years' worth of back-pay after returning home to a hero's welcome, in defiance of assurances from Baku to Budapest that he would serve out his term in Azerbaijan.

“We don't want a war, but if we have to, we will fight and win. We are not afraid of killers, even if they enjoy the protection of the head of state,”Armenian President Serzh Sarkisian fumed in a statement late on Sunday.

“They (Azerbaijanis) have been warned,” he said, calling Azerbaijan a country where “illicit orders set free and publicly glorify every bastard who kills people only because they are Armenians”.

Safarov hacked Armenian officer Gurgen Margarian to death at a military academy in Budapest where the servicemen were attending English-language courses organised by NATO.

His lawyers claimed in court that he was traumatised because some of his relatives had been killed during Azerbaijan's war with Armenia, and alleged that Margarian had insulted his country.

Armenia and Azerbaijan are locked in a long-running conflict over the disputed region of Nagorny Karabakh, where they fought a war in the 1990s.

Armenia-backed separatists seized Nagorny Karabakh from Azerbaijan in the war that left some 30,000 people dead.

The two sides have not signed a final peace deal since the 1994 ceasefire and there are still regular firefights along the front line. Analysts warn the frozen conflict risks slipping again into full-scale war.

Russia, which is part of the OSCE Minsk Group that is mediating in negotiations to find a peaceful solution to the Karabakh conflict, expressed “deep concern” over the extradition and pardon.

“We believe that these actions of the Azerbaijanis, as well as the Hungarian authorities, go against the efforts agreed at an international level primarily through the OSCE Minsk Group aimed at reducing tension in the region,” Russian foreign ministry spokesman Alexander Lukashevich said in a statement.

The EU said Baku and Yerevan should refrain from exacerbating the dispute.

In a statement, EU foreign policy chief Catherine Ashton and Enlargement Commissioner Stefan Fuele said they “are concerned by the news” of the pardon, adding that EU officials were “in contact with the relevant authorities”.

EU officials will “continue to follow the situation closely,” the statement said.

“In the interest of regional stability and on-going efforts towards reconciliation,” Ashton and Fuele said they “reiterate their call on Azerbaijan and Armenia to exercise restraint, on the ground as well as in public statements, in order to prevent an escalation of the situation.”

Baku on Monday accused Yerevan of launching a wave of attacks on eight Azerbaijani websites including those of the president and various news portals, sometimes posting photographs of the murdered Armenian soldier.

“The very fact of this action speaks of the powerlessness of Yerevan, resorting to the tactics of the weak,” Azerbaijani presidential administration official Elnur Aslanov said in a statement.

The administration also published a series of letters from citizens praising Aliyev for pardoning the convicted killer.

“I am grateful to you for the nationwide joy you have given us by releasing Ramil Safarov, returning him to his homeland and, most importantly, doing justice,” wrote one of them, Zamina Aliyeva.

Yerevan on Friday cut diplomatic ties with Hungary over the pardon, while US President Barack Obama said he was “deeply concerned” about the incident.

Hungary summoned Azerbaijan's ambassador on Sunday to protest at Baku's decision after earlier saying it had been assured Safarov would serve out his term.