Immediately after the collapse of the USSR in 1991, Iran sought to once again resume relationships with its two northern ex-Soviet neighbours, Armenia and Azerbaijan. In the context of the Karabakh conflict that pitted the two South Caucasian countries against one another, Iran, despite its Shi'a Muslim identity, decided to maintain a neutral stance. This was mostly due to the pro-Turkish and clearly anti-Iranian stance of the second Azeri president, A. Elchibey, and to the traditional close ties between Iran and Armenia. Since that time, Iranian-Armenian political, economic, and cultural relations have maintained themselves at a high level, while Iranian-Azerbaijani relations have improved, especially at the instigation of the Aliyev family in power in Baku. The difficulty for Yerevan and Baku is that they are both partners of the U.S., which, especially under G. W. Bush's presidency, has not been pleased by the good and fruitful relationships Azerbaijan and especially Armenia maintain with Tehran. The strained Iranian-American relationship puts Yerevan and Baku in an uneasy posture, and the U.S., particularly under G. W. Bush, applied relative pressure on both countries to make them ponder over their cooperation with Iran. The delicate task of Armenia and Azerbaijan is, therefore, to optimise their relationship with both the U.S. and Iran, two major actors, without hurting their respective feelings and, as much as possible, their respective interests.