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Beginning in the 1st century AD, the area came under the control of the Romans, though after the 3rd century the Persians came back into the picture. Arabs had control by the 11th century, but Seljuk Turks displaced them, laying the foundation of modern Azerbaijan. Beginning around 1050, the country enjoyed a cultural renaissance, and achieved many of its greatest architectural and artistic achievements.
A three-way struggle between Russia, Turkey and Persia ended in 1813, when Russia and Persia divided Azerbaijan along the Aras River. During the period of Russian rule, Azerbaijan's economy grew in relation to Russia's. The region was a participant in the birth of the modern petroleum industry. The first oil well was drilled in 1848, and the first oil refinery constructed in 1859. Azerbaijan provided Russia, and later the Soviet Union, with crude oil, chemicals, textiles, food and wine.
The denationalisation of the oil industry in 1872 changed Baku from a dusty backwater to a wealthy and sophisticated city attracting European investors, including the Rothschilds, and accounting for more than half of the world's oil production by the end of the century. Labour exploitation made a political hotbed of the city - it's here that Stalin cut his political teeth.
While its days as a Soviet supplier dwindled its petroleum supply, Azerbaijan remained a healthy producer of crude oil and textiles throughout the 20th century.
It had a brief taste of independence between 1918 and 1920, but was lumped by the Soviet Union into a 'federated republic' with Armenia and Georgia in 1922. In 1924, the USSR created the autonomous province of Nagorno-Karabakh, which at that time was virtually all Armenian (and thus Christian), inside the Azerbaijan Republic, placing it under Azeri rule. The Soviets dissolved the federated republic in 1936 but held the three republics within its orbit. After the brief Soviet occupation of northern Iran during WWII, the Iranian government crushed the nascent independence movement that had been started there by ethnic Azerbaijanis.
Armenians living in Nagorno-Karabakh had long resented Azerbaijani rule; the conflict erupted in 1988 and escalated after Azerbaijan's independence in October 1991. Armenian attacks on Azeri citizens in the region prompted repeated attacks from Azerbaijani forces, leading to a string of defeats for the Azerbaijanis and the resignation of two presidents. By 1993, the conflict had created thousands of casualties and about one million refugees.
A cease-fire in 1994 stemmed the worst of the blood-letting, but by 1999 the conflict was far from resolved. Nagorno-Karabakh declared itself a republic and showed little interest in giving back any territory to Azerbaijan, including the narrow strip of land connecting Karabakh with Armenia proper.
Azerbaijan's other major preoccupation has long been, and remains, oil. The Caspian region is reputed to hold about 100 billion barrels of oil and about as much natural gas, and Azerbaijan has laid claim to much of it. Azerbaijan's State Oil Company spent the 1990s making deals left and right with foreign developers for exploration and production. As a result, Baku gained the buzz of a boom town, with the first oil coming ashore in 1997.
Democracy remains an endangered species in Azerbaijan, with President Aliyev's ruling New Azerbaijan Party romping home in the November 1995 parliamentary elections, October 1998 presidential elections, December 1999 municipal elections and November 2000 parliamentary elections.
Western powers interested in exploiting the country's usefulness as an alternative source of energy are keen to see increased stability in the region and an improved human rights record for Azerbaijan. An oil pipeline to Georgia set to flow in 2005 will allow Azerbaijan to get full benefit from its massive oil reserves - that's if legal wrangling over how to split Caspian Sea reserves can be settled, and provided institutional corruption doesn't siphon off the revenues.
Heydar Aliyev died in October 2003, but by that time he'd ensured a smooth - if legally dubious - transition of power to his son, Ilham.
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