Quick Thoughts on Nagorno-Karabakh, Medvedev as "Honest Broker"

Ok, so those were The Economist's tongue-in-cheek words about Russian President Dimitri Medvedev's mediation this weekend in Sochi between Armenian President Serzh Sarkisian and Azerbaijan's Ilham Aliyev.  The topic?  The continuing escalation of hostilities between Armenia and Azerbaijain, primarily over the breakaway region of Nagorno-Karabakh, which I wrote about last week.  The AFP had a slightly, uh, more neutral take on the whole proceeding:

Russian President Dmitry Medvedev, Armenian President Serzh Sarkisian and Azerbaijan's Ilham Aliyev released a statement stating their intention to "resolve all controversial questions in a peaceful manner" after meeting in Sochi.
They agreed to hold joint investigations of skirmishes along the ceasefire line, which killed at least 22 soldiers last year, under the aegis of the Minsk group of the OSCE, chaired by France, Russia and the United States.
They also agreed to complete a swap of prisoners of war and to return the bodies of soldiers killed during the conflict, a deal that they agreed at their last summit in October.
The peaceful rhetoric came after Azerbaijan repeatedly threatened to use force to win back Karabakh if peace talks did not yield results, while Armenia has warned of large-scale retaliation if Baku launches military action.
Azerbaijan's defence minister said last month that his country was preparing for war with Armenia to "liberate its territories."
The Armenian president said in January that his country was prepared to fight its neighbour again to defend the region, which is controlled by Armenian separatists.

As The Economist notes, both Armenia and Azerbaijan have pretty much done the exact opposite of "peaceful manner" over the last, well, couple decades.  But, really, this last year has been pretty bad.  Massive escalations in military spending on both sides though, owing to its oil wealth, Azerbaijan's military spending alone is bigger than the entire Armenian budget in total.  As The Economist's expert notes, beyond the loss of life, the escalation of the conflict into a hot one could further destabilize an already unstable world oil market.  And round and round she goes...

Some of this is a rehash, and so be it, but what does this have to do with the Olympics. Obviously, Medvedev has a vested interest in both actually brokering peace in the region and being seen as the guy who brokered said peace.  Or at least a cease-fire that is actually a cease-fire.  And to do it in Sochi, in the Caucasus, would make it that much sweeter.  Medvedev is hoping for this headline: 

Russian President Brokers Peace in Nagorno-Karabakh, Part of the World Nobody Has Ever Heard of Safe for Democracy

What he's more likely to get:

Sochi, Russia Last Place Armenian/Azeri Leaders Seen Alive, as Region Plunges into Chaos

Now I know which one the IOC is banking on.  The question is, where's the smart money?