'JERUSALEM OF KARABAKH' AT THE HEART OF ARMENIA-AZERBAIJAN CONFLICT

SHUSHA, Azerbaijan, July 25, 2007 (AFP) - Torn between two culture sand at the heart of a conflict with no end in sight, the historic city of Shusha is often called the "Jerusalem of Karabakh."

Perched on a plateau overlooking the fertile valleys of Azerbaijan's disputed Nagorny Karabakh region, Shusha is a cradle of culture both for Christian Armenians, who now control it, and for Muslim Azerbaijanis, who have vowed to reclaim it as their own.

The site of a decisive battle in the 1988-1992 Nagorny Karabakh war, Shusha is now largely in ruins. The city is littered with gutted apartment blocks, derelict office buildings and crumbling churches and mosques.

To mark the 15th anniversary of their capture of Shusha in 1992, Karabakh's separatist authorities this year announced ambitious plans to rebuild the city and turn it into a cultural and tourism centre.

"Shushi was a beautiful city and it will be again," said Samvel Haratunian, the deputy head of the local administration, using the Armenian name for the city.

He said authorities plan to spend 10 million dollars (7.2 million euros) over several years restoring historical buildings, replacing rotting infrastructure and building new homes.

The restoration plans have sparked outrage among Azerbaijanis, who say that after forcing them out of the city, the separatists are now erasing their cultural heritage.

"Without Shusha there can be no Azerbaijan, the country simply cannot exist without this city. It was always a strategic Azerbaijani city," said Hikmat Sabiroglu, a refugee from Shusha who is now a political analyst in the Azerbaijani capital, Baku.

"We are very angry about the Armenian administration's plans for reconstruction. Trying to transform Shusha into an Armenian city is simply absurd," he said.

Azerbaijanis date the founding of Shusha to the mid-1700s, when it became the capital of the independent khanate of Karabakh, though Armenians claim to have settled the area earlier. It was a mixed city throughout much of its history.

Shusha was a centre of culture in the 19th and early 20th centuries, producing many of the most renowned musicians, scientists and writers in both Armenian and Azerbaijani history.

It was famed for its architectural beauty, in particular its 17 mosques and five churches. At its height, Shusha was the second-largest city in the South Caucasus after Tbilisi, with a population of more than 60,000.

Despite occasional disputes, the city's Armenian and Azerbaijani population managed to live together in relative peace until the collapse of the Russian Empire, which had absorbed the region in the mid-1800s.

Fighting broke out in 1920 over whether Shusha would be part of the newly declared republics of Armenia or Azerbaijan. Thousands died and the Armenian population fled the city.

Following the Soviet takeover of the region, control over Karabakh was given to Azerbaijan. While the majority of Karabakh's population was ethnic Armenian, Shusha remained a mostly ethnic Azerbaijani enclave.

When full-scale fighting broke out in Karabakh following the 1991 collapse of the Soviet Union, more than 95 percent of Shusha's 17,000 people were ethnic Azerbaijani.

A walled fortress overlooking the regional capital Stepanakert, Shusha was a strategic stronghold for Azerbaijani forces. For months in the winter of 1992, rockets rained down on Stepanakert from Shusha, killing thousands.

On May 8 separatist forces, who were backed throughout the conflict by newly independent Armenia, stormed the citadel in the most famous encounter of the war, taking the city in street-to-street combat.

Mass demonstrations broke out in Baku over the loss of Shusha, forcing the government to resign. Attempts to retake the city failed and when a ceasefire was signed in 1994 the city remained in separatist hands.

Today, like Jerusalem in the Israeli-Palestinian conflict, Shusha is at the heart of negotiations on a peace settlement, with both sides claiming the city as their own.

Unlike Jerusalem, Shusha is entirely under the control of one side in the conflict. Officials here insist their restoration plans will respect Shusha's Muslim history, pointing to major restoration work at an historic mosque.

But many in the city do not accept the return of its Muslim population.

"No Muslims live here now, of course. The mosques are simply historical monuments," said Father Andreas of Shusha's Ghazanchetsots Cathedral, which has been fully restored after suffering heavy damage during the war.

Slightly more than 3,000 people live here now, many of them refugees who fled Azerbaijan during the war. For them, Armenians and Azerbaijanis living side-by-side again in Shusha is simply unthinkable.

"How can you live together with evil dogs?" said Valo Baghdasarian, a fruit and vegetable seller in the town centre. "You can't give away land that was paid for with blood."