Hundreds of people protested outside the Hungarian consulate in Yerevan on Saturday after Budapest sent a soldier who murdered an Armenian back to his native Azerbaijan, where he was pardoned.
Several hundred angry demonstrators burned the Hungarian flag and threw eggs, tomatoes and coins, accusing Budapest of doing a deal with Baku in order to profit from Azerbaijan's energy riches.
"The Hungarians have sold their honour and conscience to the Azerbaijanis like a common prostitute," protest organiser Armen Mkrtchian told AFP.
Yerevan on Friday cut diplomatic ties with Hungary, which Armenian President Serzh Sarkisian said had made a "grave mistake" in extraditing the killer, who hacked his victim to death with an axe in Budapest in 2004.
US President Barack Obama also said he was "deeply concerned" about the pardon.
Hungary however insisted that Azerbaijan had promised that the soldier would serve out the remainder of his sentence after his return home and would not be freed.
"Azerbaijan's justice ministry informed the (Hungarian) justice ministry... that he would continue to serve the sentence given by the Hungarian court," the government said on its website Saturday.
Azerbaijani lieutenant Ramil Safarov was jailed for life after hacking Armenian officer Gurgen Margarian to death at a military academy in Budapest where the servicemen were attending English-language courses organised by NATO.
Safarov claimed that Margarian had insulted Azerbaijan, which fought Armenia over the disputed region of Nagorny Karabakh in the 1990s.
In another move that infuriated Armenia, Azerbaijan on Saturday reinstated Safarov to the army and promoted him to the rank of major.
"Defence Minister Safar Abiyev received him, handed him his new rank and wished him success in his future military service," a defence ministry statement said.
Azerbaijan also hit back at US criticism, insisting that the pardon awarded to Safarov after he had served eight years of his sentence conformed with a European legal convention on extradition.
"Ramil Safarov was pardoned in accordance with the constitution and laws of Azerbaijan and the Convention on the Transfer of Sentenced Persons," presidential administration official Fuad Alekserov said in a statement.
Armenia-backed separatists seized Nagorny Karabakh from Azerbaijan in the war that left some 30,000 people dead.
The two sides have not signed a final peace deal since the 1994 ceasefire and there are still regular firefights along the Karabakh frontline.