Armenia’s special services have reported a botched attempt by a “provocateur” to get the country embroiled in a spy row with neighboring Azerbaijan amid mounting tensions between the two South Caucasus republics.

In a statement released on Wednesday the National Security Service (NSS) said Zamirzhon Otazhonov, a 33-year-old citizen of Uzbekistan, an ethnic Tajik, turned to Armenia’s law-enforcement authorities on September 24 offering his services to carry out “an act of terrorism” in the Azerbaijani capital of Baku in exchange for a payment of $20,000.

Otazhonov, according to the statement, said earlier this year he worked for an Azerbaijani construction company that refused to pay him his salary, which made him feel “hatred” towards Azeris.

The NSS said its “operative-investigative measures” had exposed Otazhonov as an agent acting on the instructions of Azerbaijani special services and qualified his actions as “provocation”. It added that Otazhonov had been deported from Armenia.

“By its actions the Azerbaijani side sought to present Armenia as a sponsor of terrorism,” the NSS said.

The statement by the Armenian successor of the Soviet KGB also alleged that by sending an agent to Armenia Azerbaijan attempted to provoke a high-profile espionage scandal to “soften” the backlash over the case of Ramil Safarov, an Azerbaijani murderer of an Armenian who was handed over to Azerbaijan by Hungary several weeks ago.

Before his controversial extradition on August 31, Azerbaijani army officer Safarov had been serving a life sentence in a Hungarian jail for hacking to death a fellow Armenian student at NATO-sponsored English language courses in Budapest in 2004. He was supposed to continue to serve his sentence for at least another 22 years even after being handed over to authorities in Baku. The 35-year-old confessed axe-killer, however, was pardoned by a presidential decree shortly after repatriation. He was also promoted to the rank of major, given a house and eight years’ worth of back-pay.

Armenia reacted to the development by suspending diplomatic ties with Hungary and accusing Azerbaijan of propagating hatred towards Armenians. Official Yerevan said the move by Baku had complicated the internationally mediated efforts to find a peaceful solution to the protracted conflict over Nagorno-Karabakh.

Azerbaijan, in turn, alleged that Armenia and ‘clandestine Armenian groups’ had been plotting a ‘nemesis’ attack against Safarov, who has not been seen in public since his release and reportedly has security personnel around him 24 hours a day.

Azerbaijan has not yet reacted to the announcement by Armenia’s NSS.