Turkey and Russia have already agreed to set up a joint centre in the region to monitor the Nov. 10 ceasefire, which ended weeks of fighting between Azerbaijan's troops and ethnic Armenian forces in the enclave.

Nagorno-Karabakh is internationally recognised as part of Azerbaijan but is populated by ethnic Armenians.The ceasefire agreement, which locked in Azerbaijan's territorial gains from the fighting, involves the deployment of some 2,000 Russian peacekeepers to Nagorno-Karabakh.

Russian and Turkish officials have still to agree on the parameters of the monitoring mechanism, but Turkey, a staunch ally of Azerbaijan, also wants its own independent observation post to boost its influence in a region it sees as key to its own security.

"The biggest difference of opinion right now is the observation post Turkey will establish on Azerbaijan's lands," the Turkish source said, speaking on condition of anonymity.

"Russia thinks it is unnecessary for Turkey to establish an observation post in the region independent of the joint centre. However, this is necessary for Turkey."The source said talks would continue in Moscow and that Turkey expected eventually to reach a compromise with Russia.There was no immediate comment on the matter from Russia, Armenia or Azerbaijan.

Turkey has backed Azerbaijan, with which it has close ethnic and cultural ties, since the start of the Nagorno-Karabakh conflict nearly 30 years ago and has demanded the withdrawal of Armenian forces from all Azeri territory.

France said last week it wanted international supervision to implement the ceasefire, concerned that Russia and Turkey could strike a deal to cut out Western powers from future peace talks.