(Reuters) - Armenia on Thursday suspended ratification of peace accords with Turkey, setting back to square one U.S.-backed efforts to bury a century of hostility between the neighbors.
But the process was already deadlocked before Thursday's decision, with each side accusing the other of trying to re-write the texts and setting new conditions.
Neither parliament has approved the deal, which would bring huge economic gains for poor, landlocked Armenia, burnish Turkey's credentials as an EU candidate and boost its clout in the strategic South Caucasus.
Analysts said the Armenian decision, two days before the 95th anniversary of the killings, was not the end of the road, but an attempt to increase pressure on Turkey.
Armenia was angered by Turkish Prime Minister Tayyip Erdogan saying that ratification would depend on Armenia reaching terms with Azerbaijan, Turkey's close ally and energy trading partner, over the disputed region of Nagorno-Karabakh.
"We have decided ... not to exit the process for the time being, but rather, to suspend the procedure of ratifying the protocols. We believe this to be in the best interests of our nation," Armenian President Serzh Sarksyan said.
He said in an address to the nation that Armenia would keep its signature to the accords "because we desire peace".
"... We shall consider moving forward when we are convinced that there is a proper environment in Turkey and there is a leadership in Ankara ready to re-engage in the normalization process".
Erdogan said in Ankara Turkey remained committed to the process. "We have frequently expressed our commitment to the protocols in word and in spirit and our goal to fulfill them".
But he gave no sign that he would withdraw the condition that Armenia and Azerbaijan reach a deal on Nagorno-Karabakh, something that has evaded mediators for more than 15 years.
"We have expressed clearly, to all parties concerned, our intention to achieve comprehensive peace in the region".
U.S. Ambassador to Turkey James Jeffrey said Washington hoped the process would continue but added it was up to Ankara and Yerevan to end their differences.
Analysts noted the wording of the Armenian decision was a suspension, not a withdrawal.
"This was a lot weaker than feared," said Yerevan-based U.S. analyst Richard Giragosian. "This is a political tactic rather than a shift in strategic policy".
Both governments face opposition at home, and in Armenia's case from its huge diaspora, many of whom trace their roots to the World War One killings and deportations.
Armenian opponents say the accords betray Armenian efforts to have the massacres internationally recognized as genocide.
Turkish critics say the deal is a betrayal of fellow Turkic-speaking Azerbaijan, an oil and gas exporter and one of the West's key hopes for gas for the planned Nabucco pipeline.
Turkey closed its border with Armenia in 1993 in solidarity with Azerbaijan during the war in Nagorno-Karabakh, when ethnic Armenians backed by Armenia threw off Azeri rule with the collapse of the Soviet Union.
Azerbaijan says the frontier must stay shut until ethnic Armenian forces pull back, and has lashed out at Washington for backing the thaw.
Armenia's decision came as the country of 3.2 million approaches the April 24th anniversary of the killings, when tens of thousands lay flowers at a hilltop monument in the capital.
U.S. President Barack Obama will issue a statement to mark the anniversary of the massacres, a defining element of Armenian national identity and a thorn in the side of modern Turkey.
Muslim Turkey accepts many Christian Armenians died in partisan fighting beginning in 1915 but denies that up to 1.5 million were killed and that it amounted to genocide -- a term used by some Western historians and foreign parliaments.
Armenians are again pressing Obama to fulfill a campaign pledge to label the killings as genocide, something he appears unlikely to do for fear of alienating NATO-member Turkey.
Additional reporting by Ibon Villelabeitia and Tulay Karadeniz in Ankara and Ayla Jean Yackley in Istanbul; Writing by Matt Robinson and Ibon Villelabeitia; editing by Alison Williams