UNITED NATIONS: UN Secretary-General Antonio Guterres has welcomed the agreement between Armenia and Azerbaijan to improve their relations, said his spokesman.

"The Secretary-General welcomes the joint statement issued by Armenia and Azerbaijan announcing a series of confidence-building measures and reaffirming their commitment to normalise bilateral relations," said Stephane Dujarric, the UN spokesman, on Friday.

The United Nations encourages the parties to build on the agreement to advance mutual confidence and secure long-term peace for the benefit of their population and the region, Dujarric told a daily press briefing.

Armenia and Azerbaijan said on Thursday that they have reached an agreement on taking confidence-building steps by releasing prisoners of war following their first-ever direct negotiations with no mediators involved, Xinhua news agency reported.

The two countries said they intend to normalise relations and reach a peace treaty.

Armenia and Azerbaijan have been at loggerheads over the disputed region of Nagorno-Karabakh, internationally recognised as part of Azerbaijan, since 1988. Peace talks have been going on since 1994 when a ceasefire was agreed on, despite sporadic clashes since then.