Baku and Yerevan have been locked in a decades-long territorial conflict over Azerbaijan's Armenian-populated region of Nagorno-Karabakh, which Baku reclaimed in September in a lightning offensive.

Addressing lawmakers in Yerevan, Pashinyan said his government's planned increase in defence spending by some seven percent next year "isn't a preparation for war, but rather a preparation for peace."

"I am confident, our neighbouring countries know it well that we are not going to attack anyone," he said.

"Reforming armed forces is not only a right, but also an obligation of an independent country and that's what we are doing."

He also said that Yerevan's "political will to sign, in the coming months, a peace agreement with Azerbaijan remains unwavering."

Internationally mediated normalisation talks between the ex-Soviet republics have seen little progress but both Pashinyan and Azerbaijan's Ilham Aliyev pledged to sign a comprehensive peace agreement by the end of the year.

The pair have held several rounds of talks under EU mediation.

But last month, Aliyev refused to attend a round of negotiations with Pashinyan in Spain, over what he said was the "biased position" of one of the participants, France.

French President Emmanuel Macron and German Chancellor Olaf Scholz had been scheduled to join EU-chief Charles Michel as mediators at those talks.

So far, there has been no visible progress in EU efforts to organise a fresh round of negotiations.

Russia, the traditional power-broker in the region, has been bogged down in its war in Ukraine and Europe has taken a lead role in mediating the decades-long dispute between Armenia and Azerbaijan.