Azerbaijan rejected on Thursday a U.S. State Department report that the ex-Soviet state had been a hub for Moslem sympathisers.

Azerbaijan rejected on Thursday a U.S. State Department report that the ex-Soviet state had been a hub for Moslem sympathisers of breakaway Chechnya's battle against Russian troops. The report on "Patterns of Global Terrorism" for 1999, issued earlier this year, said Azerbaijan "served as a logistic hub for international Mujahideen with ties to terrorist groups, some of whom supported the Chechen insurgency in Russia". But it also said the country had enhanced border controls to prevent foreign Mujahideen Moslem fighters from operating on its territory. "The accusation that Azerbaijan helps international terrorists connected to military activities in Chechnya is a groundless one," the foreign ministry said in a statement. "Azerbaijan has condemned and continues to condemn terrorism in all its forms." The mainly Moslem Caspian Sea state has maintained close ties with the United States, the source of billions of dollars of investment in the country's crude reserves. But Azerbaijan is especially sensitive to accusations it aids terrorism after Russia accused it of providing training for Chechen rebels and giving them weapons. Senior Azeri officials have denied the accusations and supported Russia's military offensive against the rebels. Months into the war, Russia says it controls most of Chechnya but its troops have yet to bring the region's southern mountains under control and tensions have mounted in the province after an upsurge in rebel attacks.