A Russian-brokered ceasefire agreement in November halted the six-week conflict between Azeri and ethnic Armenian forces, locking in territorial gains for Azerbaijan.
But tensions persist, with low-level sporadic violence, prisoners of war still held by both sides, and ambiguity about how a prospective transport corridor through the region will work.
Putin said the ceasefire deal, which saw Moscow deploy peacekeepers, was being implemented without serious incident and the talks had been useful.
“We were able to agree and sign a joint declaration on developing the region,” he said. “I’m talking about concrete steps to build economic links and to develop (transport) infrastructure projects.”
Armenian Prime Minister Nikol Pashinyan said it had not been possible to broker an exchange of remaining prisoners however.
But he, and Azeri President Ilham Aliyev, indicated progress in other areas, with both talking positively about economic and infrastructure prospects.
Aliyev said his country would have a rail link for the first time in over three decades with Nakhchivan, an Azeri exclave that borders Turkey and Iran, and that landlocked Armenia, via Azeri territory, would get rail links with Russia and Iran.
The atmosphere at the talks was frosty. Pashinyan and Aliyev did not shake hands, only exchanging curt greetings when they sat down in the Kremlin opposite Putin.
Nagorno-Karabakh is internationally recognised as part of Azerbaijan, but ethnic Armenians and Azeris both regard it as part of their historic homelands and fought a much bigger war in the 1990s that left tens of thousands dead.
For Russia, the latest conflict highlighted the rising influence of close Azeri ally Turkey in the South Caucasus, an area Moscow traditionally sees as its own sphere of influence.
But by brokering the deal and getting Russian peacekeepers on the ground, Putin has thwarted a stronger Turkish presence for now while expanding Moscow’s own military footprint.
Nagorno-Karabakh: Putin hosts talks between Azerbaijan, Armenia leaders The British Journal Editors and Wire Services/ France 24.