International mediation over the disputed Nagorno Karabakh enclave is \"hopeless,\" oil-rich Azerbaijan\'s President Ilham Aliyev said, vowing to retake it by \"peaceful means or by war,\" in a speech to the military. Aliyev, who\'s country fought its neighbour and fellow former Soviet republic Armenia over control of the majority-Armenian enclave in Azerbaijani territory from 1988 to 1994, also said he would use oil revenues to beef up the military.Oil will bring Azerbaijan 140 billion dollars over the next two decades, Aliyev said Fridy and \"there is no doubt we will use this money to strengthen the army so that it can return our lands at any moment.\" The president said international efforts to mediate the conflict were \"hopeless\" and Azerbaijan was willing only to negotiate the restoration of its full control over Karabakh. Aliyev was speaking at a graduation ceremony of cadets at Azerbaijan\'s highest military academy, named in honor of his father Heydar Aliyev whom the younger Aliyev succeeded as president in 2003. Azerbaijan\'s first major oil pipeline, which is operated by energy giant BP and is backed by the United States, goes online on July 13 and will give the landlocked Caspian Sea an important export route to Western markets.In his speech, which was followed by a military parade with the participation of troops, Russian-built helicopters and fighter jets, Aliyev said \"we will restore our territorial integrity by peaceful means or by war.\" Military spending in this predominantly Shiite Muslim country of eight million has quadrupled to 700 million dollars in 2006 over the past four years Aliyev said, adding that on Thursday he ordered servicemen\'s wages to be increased by 100 percent.\"We are buying modern armaments,\" Aliyev said without elaborating, \"our expenses in the military sphere will grow even more,\" he added.Karabakh broke away from Azerbaijan in the late 1980s, sparking a six-year conflict between Armenia and Azerbaijan that claimed 25,000 lives and displaced hundreds of thousands of people. (AFP)