The US and Russia urged the leaders of Azerbaijan and Armenia to restore a truce when they met on Monday for the first time since fighting erupted over Nagorny Karabakh.
Russian Foreign Minister Sergei Lavrov and US Secretary of State John Kerry met Azerbaijani President Ilham Aliyev and his Armenian counterpart Serzh Sarkisian.
The US, Russia and France form the "Minsk Group", created to deal with the two-decade old battle for the disputed region, and called the talks in a bid to prevent renewed bloodshed.
"This is a solvable conflict, there are some conflicts out there that simply have to be managed. But this is one that can be solved," a senior US official told reporters.
"This could be a win-win for both sides," the State Department official said, adding that unlike for example on the issue of Syria, Washington and Moscow are in agreement.
Fighting erupted in Nagorny Karabakh in early April, killing at least 110 people and wounding scores more.
The conflict has long festered, with dozens killed every year, but April\’s outbreak was the worst since a 1994 ceasefire, now monitored by just six envoys from the Organisation for Security and Cooperation in Europe (OSCE).
A truce hammered out by Moscow halted the latest bloodshed but the situation remains on a knife-edge, with both sides accusing the other of violating the agreement.
A French envoy was also in the Austrian capital for the talks. Kerry met both presidents separately before all sides gathered for a formal dialogue.
Kerry also met Lavrov before the official gathering.
"This is an issue where we see eye-to-eye with the Russians. We have no differences of opinion," the US official said.
The negotiations were to focus on a reaffirmation of the ceasefire and a resumption of negotiations, a senior US state department official told AFP.
But another senior American envoy cautioned not to expect an immediate breakthrough in what would be the rival presidents\’ first encounter since December.
Azerbaijan and Armenia have feuded over Nagorny Karabakh since Armenian separatists seized the landlocked territory in a war that claimed some 30,000 lives in the early 1990s.
With peace efforts stuttering to a halt in recent years, both sides in the conflict began rearming heavily, with energy-rich Azerbaijan spending vast sums on new weaponry.
And yet, despite increasingly feverish rhetoric from the rivals, the recent flare-up still appeared to catch the international community by surprise.
While the two sides accused each other of starting the fighting, analysts said it seemed Azerbaijan — suffering from falling oil prices — launched the initial attack.
In the first shift in the frontline since 1994, Azeri forces seized key positions, some of which they managed to cling on to despite a fierce Armenian counterattack.
The agreement by the two leaders to hold direct talks in Vienna appears a positive sign, but few expect there to be any major progress at Monday\’s encounter.
Moscow, which has sold weapons to both sides but has a military treaty with its close ally Armenia, is seen as central to stopping a conflict that some fear could spread.
Turkey — at loggerheads with Moscow since Ankara downed a Russian jet near its border with Syria last year — has pledged to support its ally Azerbaijan.
Despite the international pressure being applied, commentators on both sides feel that unless there is a conclusive resolution there will be more violence.