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imageYEREVAN: Armenia's Prime Minister Hovik Abrahamian resigned on Thursday after anger over a protracted hostage crisis highlighted popular discontent over official failings in the ex-Soviet nation.

"I decided to step down so that the President can form a new government," Abrahamian, 58, told a cabinet meeting.

Abrahamian "will be replaced by the former Yerevan mayor Karen Karapetyan", a top government official told AFP on condition of anonymity.

Russian-allied President Serzh Sarkisian had promised to reshuffle his cabinet in the wake of the hostage crisis that rocked the tiny Caucasus republic in July.

A group of anti-government gunmen seized a police building in Yerevan for two weeks, killing two police and taking several high ranking officers hostage. After clashes and lengthy negotiations they surrendered on July 31. The stand-off sparked anti-government demonstrations over the authorities' perceived mishandling of the crisis and demands for Sarkisian's resignation over failures to improve living standards in the impoverished country.

More than 70 people, including journalists, were injured in clashes at the demonstrations and dozens were arrested.

Former military officer Sarkisian pledged in early August to introduce a government of "national reconciliation", saying that it would take months to get a new team together.

Armenia's economy has been hit by the spillover from the economic crisis in Russia. Some 30 percent of the population lives below the official poverty line, according to the Asian Development Bank.

Copyright AFP (Agence France-Presse), 2016

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