Aliyev has stated that Azerbaijan seeks to maintain good relations with all countries, especially its neighbors. In practice, Azerbaijan's relations with foreign states have been guided by their position regarding continued Azerbaijani sovereignty over NK. Aliyev has reiterated that he would not agree to any settlement of the NK conflict that violates the "sacred" principle of the sanctity of Azerbaijan's existing borders and its territorial integrity. Aliyev has continued Elchibey's policy of pursuing close ties with Turkey. Ties with Iran have been rocky, influenced by Iran's growing trade relations with Armenia and sensitivity between Azerbaijan and Iran over the status of Iran's ethnic Azerbaijani population. In early 2000, Aliyev visited Iran and called for improved economic, cultural, and political ties.
Aliyev has endeavored to involve foreign firms in the development of oil and natural gas resources in order to give these countries an interest in Azerbaijan's continued independence. In his inaugural address, Aliyev hailed the recent successes of Azerbaijan's foreign policy. He noted the many foreign delegations that have visited his country and the many agreements signed. He is particularly proud of having hosted the European Union-sponsored Silk Road Conference in 1998, at which transport development in the region was discussed.
At a news conference in February 2000 following his visit to the United States, Aliyev described the positive state of United States-Azerbaijan relations. However, he has criticized a U.S. law that limits aid to Azerbaijan as an "unfair decision." Sources of friction with Russia include the rejection of a predominantly Russian peacekeeping force in NK, allegations of a Russian "tilt" toward Armenia in NK peace talks, and the refusal to permit Russian troops to patrol its borders. In early 1997, then-Russian president Boris Yeltsin admitted that some Russian weaponry had been transferred to Armenia without authorization, fueling Azerbaijan's view that Russia tacitly supports Armenia in the NK conflict. In meeting with Russia's president Vladimir Putin in late January 2000, Aliyev reported that Putin praised Azerbaijan's treatment of ethnic Russians in Azerbaijan and recognized that Azerbaijan was not aiding separatism in Russia's breakaway Chechnya region, an earlier point of contention.
As of 2002, Azerbaijan and Armenia had not succeeded in resolving their long-standing dispute in the NK conflict. NK is located within Azerbaijan's borders but has a population consisting primarily of ethnic Armenians. During a September 1999 summit of Baltic and Black Sea political leaders in Yalta, Aliyev met with Armenia's president, Robert Kocharyan, and the two leaders attempted to arrive at an official status for the disputed region that would be agreeable to both countries. Armenians wanted the region to be granted de facto independence while the Azerbaijanis proposed making it an autonomous republic, basically the same designation accorded it when it was part of the former Soviet Union. International hopes that a statement of intentions could be signed by the two sides at the November 1999 Organization for Security and Cooperation in Europe (OSCE) Summit were not met. The Summit Declaration endorsed "a lasting and comprehensive solution" to the NK conflict (and did not reaffirm Azerbaijan's territorial integrity). Both Kocharyan and Aliyev called for the OSCE to foster the creation of a Caucasian regional security system (though they disagreed on details). Such a system was also discussed when the two presidents met with President Vladimir Putin in Moscow in late January 2000.
In early 2002, Aliyev and Putin met again to discuss who would control the Caspian Sea region; Azerbaijan, Russia, Kazakhstan, Turkmenistan, and Iran all make claims to the landlocked Caspian Sea, known to be rich in natural resources. Russia, Kazakhstan, and Azerbaijan had all agreed on boundary lines as of early 2002 and discussions were ongoing with Turkmenistan. The former Soviet states agree to limit their claims according to their relative coastlines, but Iraq favors dividing the sea equally among the five nations that enclose the Caspian Sea.