No reason was given for the cancellation, but the announcement came after Azerbaijan last week questioned Washington's neutrality as a mediator in the conflict over the breakaway Nagorny Karabakh region and accused the US of increasingly siding with foe Armenia.

"The exercises have been cancelled," Azerbaijani defence ministry spokesman Eldar Sabiroglu said on ANS television.

A US embassy spokesman confirmed that the exercises, scheduled for next month and involving about 200 US troops, had been cancelled at Azerbaijan's initiative.

"The cancellation is from the Azerbaijani government," the spokesman told AFP, declining to comment further.

Ali Hasanov, a senior aide to President Ilham Aliyev, last week said that Azerbaijan was "not happy" with recent actions in Washington and accused some in the United States of "losing their neutrality and openly supporting Armenia."

The United States is one of three co-chairs, along with France and Russia, of the so-called Minsk Group, which is trying to negotiate a resolution to the longstanding conflict over Karabakh.

Tensions over Karabakh have risen in recent months amid US-backed efforts by Armenia and Turkey, a close ally of Azerbaijan, to establish diplomatic ties and reopen their border after decades of hostility.

Azerbaijan insists that the reconciliation process should not move forward without progress on Karabakh and has accused Western governments and Ankara of ignoring its interests.

The energy-rich country is a key Western partner in strategically important projects to ship oil and gas from the Caspian Sea region to Europe through Turkey, bypassing Russia.

Backed by Yerevan, ethnic Armenian forces seized control of Nagorny Karabakh and seven surrounding districts from Azerbaijan in the early 1990s, in a war that claimed an estimated 30,000 lives.

Armenia and Azerbaijan have cut direct economic and transport links and failed to negotiate a settlement on the region's status.

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