Azerbaijani President Ilham Aliyev has said that a peace deal with Armenia was closer than ever before, as teams from the two countries headed to the border to start demarcation work, hoping to end decades of territorial disputes.

Aliyev's optimism over a potential agreement between the arch-foes comes after a flurry of progress towards border delimitation that has sparked protests in Armenia, TRT reported. 

On Tuesday teams from both countries began physical inspections of a border section that the two sides had agreed to mark based on Soviet-era maps.

"We are close as never before," Aliyev said on Tuesday of an elusive peace deal.

"We now have a common understanding of how the peace agreement should look like. We only need to address details," he said.

"Both sides need time... We both have political will to do it."