Armenia's prime minister said on Tuesday (October 23) that Azerbaijan's planned defence budget boost was part of an arms race intended to put pressure on the Caucasus country in a long-running territorial dispute. Azerbaijan's President Ilham Aliyev announced on Monday (October 22) an increase in defence spending by nearly one third next year to build up its strength against Armenia, the main backer of Azerbaijan's breakaway region of Nagorno-Karabakh. "We consider this part of an arms race and we consider this as a wish by Azerbaijan to use its oil revenue to put pressure on us," Armenian Prime Minister Serge Sarkisian said, during a trip to the United States. Predominantly Armenian Karabakh broke away from Azerbaijan around the time the Soviet Union collapsed in late 1991. Tens of thousands of people died in a war before a shaky truce was reached in 1994. Aliyev told a government meeting that the military budget will grow by 300 million U.S. dollars to 1.3 billion U.S. dollars in 2008. "We've always said that if Azerbaijan makes any infringement into Nagorno-Karabakh, Armenian armed forces are the guarantee, and they will intervene. I am against the use of force, but it doesn't mean we are scared of war, we just don't want war," Sarkisian said. International attempts to negotiate a solution to Karabakh, which says it will accept nothing less than full independence, have led nowhere. The loss of Karabakh and a large swathe of territory around it has become a major humiliation for oil-rich Azerbaijan, whose economy has been one of the world's fastest-growing in the past few years.