By Felix Light

TBILISI Armenian Prime Minister Nikol Pashinyan on Tuesday said he was ready to sign a peace deal with Azerbaijan by the end of the year, even as Baku accused Yerevan of undermining the process of normalising their relations.

Russia's state-run TASS news agency cited Pashinyan as telling the European Parliament in Strasbourg that Armenia was ready to end more than three decades of hostilities, and to guarantee the safety of ethnic Azeris in Armenia.

But in a statement later on, Azerbaijan's Foreign Ministry accused Pashinyan of undermining the peace process with "aggressive rhetoric". It said Armenia as a country had a reputation for "blunt falsification of facts and history".

The two countries have in recent weeks stated their willingness to sign a treaty to end decades of intermittent conflict over Nagorno-Karabakh, a breakaway region that Azerbaijan recaptured last month, prompting most of its population of some 120,000 ethnic Armenians to flee to Armenia.

Armenia describes the Karabakh Armenians' flight as ethnic cleansing driven by the threat of violence after a nine-month blockade of essential supplies, the latest chapter in a conflict between Christian Armenians and Turkic Muslim Azeris that goes back more than a century.

Azerbaijan says the Karabakh Armenian civilians were welcome to stay and be integrated in Azerbaijani society, but left voluntarily.

Beyond Karabakh, the two countries' shared border is riddled with small exclaves surrounded by the other side's land - sovereign territory that is in effect occupied by the other side - complicating a final peace deal. Exchanges of fire across the frontier, sometimes fatal, are a regular occurrence.

Russian President Vladimir Putin last week said he believed a peace deal was achievable if both sides showed goodwill, playing down the difficulty of reaching an agreement on their shared border.

Azerbaijani President Ilham Aliyev on Monday made his first visit to the territories retaken by Azerbaijan last month, and was filmed raising Azerbaijan's flag in the region's capital and treading on the flag of Karabakh's dissolved ethnic Armenian authority.

(Reporting by Felix Light in Tbilisi and Nailia Bagirova; Editing by Kevin Liffey)